Thursday, March 14, 2019

HCL Tech falls 2% on a US firm acquisition; analysts mixed

Software company HCL Technologies shares fell 2 percent intraday Thursday after the company announced acquisition of a US firm to boost its digital business.

The stock was quoting at Rs 1,009.55, down Rs 18.65, or 1.81 percent, on the BSE, at 11:38 hours IST.

The global technology company, on March 13, announced the acquisition of Strong-Bridge Envision (SBE), a digital transformation consulting firm with offices in Seattle, Denver, Atlanta and New York City.

"SBE will enhance our digital consulting offerings with their strong capabilities in digital strategy development, agile program management, business transformation and organizational change management. These capabilities combined with our next generation Mode 2 offerings in experience design, app modernization & data analytics will help us deliver end-end digital journeys to our customers," Anand Birje, Corporate Vice President and Head of Digital and Analytics Practice at HCL Technologies said.

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While maintaining 'outperform' with a price target at Rs 1,310, global brokerage house Credit Suisse said the size of SBE acquisition is small.

"The acquisition will add 50 bps to FY20 growth and help company enhance their Mode-2 offerings," it added.

However, Morgan Stanley, which is underweight on the software stock with a price target at Rs 931, also said acquisition will add 0.5 percent to consolidated revenue growth and will boost company's digital & analytics capabilities.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions. First Published on Mar 14, 2019 12:30 pm

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