Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>Tata Technologies (TT) raised around US$370m in its India IPO in Dec 2023.</li>
<li>Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>


Tata Technologies (TT) raised around US$370m in its India IPO in Dec 2023.
Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Tata Technologies IPO Lockup Expiry - US$1.5bn Lockup Release, Some Funds Are Sitting on 40x Gains

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<ul>
<li>Following <a href="https://www.smartkarma.com/entities/hcl-technologies-ltd" target="_blank" data-smartkarma-citation="entities:20025:1" rel="noopener">HCL Technologies (HCLT IN)</a>'s fiscal 4Q2024 earning report last month, we have witnessed an acceleration in near-term earnings estimates downgrades.</li>
<li>Based on near-term momentum indicators, it seems that we are only at the beginning stage of a prolonged period of underperformance.</li>
<li>HCL Technologies currently trades roughly one standard deviation above its rolling 5-year historic average PE ratio.</li>
</ul>


Following HCL Technologies (HCLT IN)'s fiscal 4Q2024 earning report last month, we have witnessed an acceleration in near-term earnings estimates downgrades.
Based on near-term momentum indicators, it seems that we are only at the beginning stage of a prolonged period of underperformance.
HCL Technologies currently trades roughly one standard deviation above its rolling 5-year historic average PE ratio.


HCL Technologies: Negative Technical Analysis Signals

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>In Q4FY24, HCL-Tech Ltd (HCLT) reported revenue of Rs 28,499 Cr, up 0.2% QoQ which stood below expectations.</li><li>The company’s operating profit stood at Rs 5,018 Cr, reporting a de-growth of 11% on a QoQ basis.</li><li>Below our expectations, the company’s operating margins, too, declined by 40bps to 17.6%, which was largely led by lower services revenue margins and lower contribution from P&amp;P business during the</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In Q4FY24, HCL-Tech Ltd (HCLT) reported revenue of Rs 28,499 Cr, up 0.2% QoQ which stood below expectations.The company’s operating profit stood at Rs 5,018 Cr, reporting a de-growth of 11% on a QoQ basis.Below our expectations, the company’s operating margins, too, declined by 40bps to 17.6%, which was largely led by lower services revenue margins and lower contribution from P&amp;P business during theContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HCL Technologies - Results Miss Estimates; Skeptical Outlook

Thematic (Sector/Industry)

<ul>
<li>Fiscal 4Q 2024 results have shown the first signs of a bottoming in y/y constant currency revenue growth rates, leading to expectations for accelerating growth rates over the medium term.</li>
<li>We have witnessed a steady long-term negative trend in operating margins for most of the industry.</li>
<li>Forward PE ratios are at, or above, long-term historic average trading levels. We find very little upside for these shares whilst maintaining a relative preference for <a href="https://www.smartkarma.com/entities/infosys-ltd" target="_blank" data-smartkarma-citation="entities:267:1" rel="noopener">Infosys Ltd (INFO IN)</a>.</li>
</ul>


Fiscal 4Q 2024 results have shown the first signs of a bottoming in y/y constant currency revenue growth rates, leading to expectations for accelerating growth rates over the medium term.
We have witnessed a steady long-term negative trend in operating margins for most of the industry.
Forward PE ratios are at, or above, long-term historic average trading levels. We find very little upside for these shares whilst maintaining a relative preference for Infosys Ltd (INFO IN).


Indian IT Services: Where Are We in the Growth Cycle?

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Hiring trends and job postings have historically been correlated with growth in the sector</li><li>We look at the CompTIA data: the key highlights are (1) tech hiring is expected to accelerate (from 1.2% in CY23 to 3.1% in CY24E) in the US (2) growth in tech workforce is expected across regions, especially in areas with large tech presence of Indian IT (both east/west coast and Texas) (3) tech hiring growth in the automotive OEM region is lower than in most states</li><li>While there are always limitations to tech hiring estimates, the indicators and linearity are pointing to ‘demand recovery’ possibly towards the second half of the year.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hiring trends and job postings have historically been correlated with growth in the sectorWe look at the CompTIA data: the key highlights are (1) tech hiring is expected to accelerate (from 1.2% in CY23 to 3.1% in CY24E) in the US (2) growth in tech workforce is expected across regions, especially in areas with large tech presence of Indian IT (both east/west coast and Texas) (3) tech hiring growth in the automotive OEM region is lower than in most statesWhile there are always limitations to tech hiring estimates, the indicators and linearity are pointing to ‘demand recovery’ possibly towards the second half of the year.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

IT Sector: Tech Hiring to Recover in CY24

India

HCL Technologies Limited provides software development and related engineering services.  The Group's technologies utilize a variety of technologies, including Internet and e-commerce, networking, internet telephony, embedded software, ASIC/VLSI design and testing, satellite and wireless communications, and component based object technologies, including COM, DCOM and COBRA.

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HCL Technologies (HCLT IN)

Tata Technologies IPO Lockup Expiry - US$1.5bn Lockup Release, Some Funds Are Sitting on 40x Gains

Tata Technologies raised around US$370m in its India IPO in Dec 2023. In this note, we talk about its upcoming US$1.5bn lockup release.

Sumeet Singh

HCL Technologies: Negative Technical Analysis Signals

In this insight, we perform a technical analysis of HCL Technologies by looking at earnings forecast revision trends, momentum indicators, and...

Wium Malan, CFA

HCL Technologies - Results Miss Estimates; Skeptical Outlook

In Q4FY24, HCL-Tech Ltd (HCLT) reported revenue of Rs 28,499 Cr, up 0.2% QoQ which stood below expectations. The company’s operating profit stood...

Axis Direct

Indian IT Services: Where Are We in the Growth Cycle?

In this insight, we analyse the long-term growth trends, operating margins, and current valuation levels of Tata Consultancy Services, Infosys, HCL...

Wium Malan, CFA

IT Sector: Tech Hiring to Recover in CY24

While there are always limitations to tech hiring estimates, the indicators and linearity are pointing to ‘demand recovery’ possibly towards the...

HDFC Securities

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