Shares of this large-cap IT stock fell around 2 percent in Tuesday’s trading session after State Street, partner of a Joint Venture (JV) company formed between State Street and the large-cap company’s subsidiary in 2012, is going to assume full ownership of the company.
With a market capitalization of Rs 3.56 lakh crores, the stocks of HCL Technologies Limited started their trading session on Tuesday at Rs 1,340.05 and currently trades at Rs 1,312.80, dipping nearly 2 percent as compared to the previous closing levels of Rs 1,336.70 apiece.
Through a regulatory filing with the Bombay Stock Exchange (BSE), the company informed that HCL Investments UK Limited, a step-down subsidiary of HCL Technologies Limited, has entered into a binding MoU with State Street International Holdings, a US-based company, to acquire HCL UK’s entire 49% equity stake in the JV.
The JV company was formed between the two companies in 2012 to provide business operations services. The Share Purchase Agreement (SPA) for the same shall be executed in due course and is expected to be completed by second quarter of CY’2024.
“State Street continues to be one of our strategic and top 15 clients in IT. We are proud of the collaboration over the past eleven years and look forward to our continued partnership across key priority areas of State Street.” commented Mr. Srinivasan Seshadri, Chief Growth Officer and Global Head, Financial Services, HCLTech.
After feeling the heat of operating expenses in the June 2023 quarter, the company has been successful in bouncing back and reporting an increase in its operating revenues and net profits.
The former rose from Rs 26,296 crores during Q1FY23-24 to Rs 26,672 crores during Q2FY23-24, and, the latter, during the same period, shifted up from Rs 3,531 crores to Rs 3,833 crores.
The revenue mix, as per the September 2023 quarter, shows 90.60 percent revenues from the ‘Services’ segment, i.e., 74.60 percent from ‘IT & Business Services’ and 16 percent from ‘Engineering and R&D services’. The remaining share comes from ‘HCLSoftware’ adjusting for the inter-segment transactions.
HCL Technologies Limited is engaged in the business of providing Information Technology (IT) solutions to a wide range of enterprises in India. Having clients worldwide, the company offers Internet of Things (IoT) services, cybersecurity, cloud services, etc. The company’s clients are scattered across various industries including financial services, healthcare, etc.
Written by Amit Madnani
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