HCL Tech Jumps Over 4% On Bagging A $2.1 Billion Deal From Verizon

HCL Technologies’ share price rose almost 5 per cent in the morning trade on BSE on Friday. The scrip scaled an intraday high of Rs 1,186.95, a day after it announced a deal with Verizon Business.

HCL Technologies on August 10 announced signing a $2.1-billion deal with the US telecom major. Through the strategic global partnership, HCL Tech will become the primary managed network services (MNS) collaborator for Verizon Business in all networking deployments for global enterprise customers.

According to a statement from the company, the partnership which combines “Verizon’s networking power, solutioning, and scale with HCL Technologies’ market leading managed service capabilities” will help usher in a new era of large-scale wireline service delivery for enterprise customers.

“HCL Tech will be Verizon Business’s primary collaborator in all deployments involving MNS globally for enterprise customers,” HCL Tech said, adding that “Verizon Business will lead sales, solutions, and customer acquisitions, and HCL Tech will lead post-sale implementations and ongoing support”.

HCL Tech pointed out that the partnership will offer customers a “best-in-class MNS portfolio, a highly digitized experience with data-driven service models, enhanced efficiency and lifecycle management with a frictionless interface, a broad end-to-end partner ecosystem, and joint innovation on an integrated platform.”

“Managed Network Services is core to our business, and we’re proud to collaborate with Verizon Business to lead MNS in all of their network deployments, modernization and operations for private enterprise,” said C Vijayakumar, CEO and Managing Director, HCLTech.

“Our data-driven service delivery, advanced network capabilities and frictionless customer interfaces combined with the unique strengths and resiliency of the Verizon network will enable enterprises to drive better business outcomes and time to market,” said Vijayakumar.

Meanwhile. the June quarter results of HCL Tech missed Street estimates. It reported a 7.6 per cent year-on-year growth in consolidated net profit in the first quarter of fiscal 2023-24. The IT major’s profit after tax declined by 11.27 per cent in Q1FY24, compared to ₹3,983 crore in the preceding March quarter of fiscal 2022-23.

The company retained its guidance of 6-8 per cent constant currency revenue growth for FY24, and operating margin or EBIT margin at 18-19 per cent. According to the FY24 guidance, the constant currency services revenue growth is expected to be between 6.5-8.5 per cent.

In the last one year, shares of HCL Tech have gained 21 per cent against a 10 per cent gain in the equity benchmark Sensex.