Should You Follow The Crowd And Invest In HCL Tech? Think Again!

You might be wondering whether to follow the crowd and invest in HCL Tech shares. With a lowered revenue forecast for FY24, should you buy, sell, or simply hold?

HCL Tech had a good Q2, no doubt. Profits went up 10%, and revenue rose 8% compared to last year. The market loved it, and the share price shot up 3.5%. That sounds like good news, right?

Well, here’s the twist. Despite the good numbers, HCL Tech lowered its revenue outlook for FY24. They’re now expecting 5-6% growth instead of 6-8%. Currently, the HCL share price is around ₹1,255.

This made some market experts a bit nervous. Even big rival Infosys did the same thing recently. However, HCL’s EBIT margin projection remains steady at 18-19%, which is positive.

Now, What Do The Experts Say?

Most are still pretty bullish. UBS, Kotak, Motilal Oswal, Sharekhan, and others say it’s a good buy or at least neutral. 

They’ve even bumped up their target prices a bit. But JP Morgan is a bit opposite here, saying ‘Underweight’ and putting the target price at ₹1,070.

Why Is Everyone Influencing You To Buy HCL?

You must have noticed that most bloggers, influencers, and news portals telling people to buy HCL Tech. One reason could be that the company’s fundamentals seem strong. 

They’ve been investing in digital tech, and it’s paying off. The lower revenue guidance might just be them being cautious because of uncertain times.

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But remember, when everyone’s buying, prices can get inflated. Also, I remembered a great point about doing the opposite of the majority in the stock market. This contrarian approach argues that when everyone is overly optimistic, it might be time for caution.

The Key Takeaway, Buy Or Sell?

HCL Tech isn’t a straight-up ‘buy’ or ‘sell’. It’s something to be aware of. They have strong fundamentals, but there’s also some caution in the air. 

So if you’re thinking of investing, make sure you’re okay with the risks involved, especially given the revised revenue outlook. Do your own research, or get help from a reliable consultancy!