HCL Technologies named in US PERM suspension; Q2 on 12 Oct

HCL Technologies is one of eight companies the US Labor Department suspended from its Permanent Labor Certification (PERM) programme on 8 October. It cannot file new PERM applications for HCL, and pending ones will not be processed. Existing H-1B visas are not cancelled. Q1 FY27 numbers (consolidated, 13 July): Revenue: Rs 34,579 crore, up 13.9 percent YoY Net profit: Rs 4,624 crore, up 20.3 percent YoY from Rs 3,843 crore EBIT margin: 16.9 percent, up 56 basis points YoY New deal wins: $2,407 million; FY27 guide 1 to 4 percent constant-currency growth HCL’s PERM count is not in any source I could reach, so the exposure cannot be sized. Reports on 9 October call the immediate effect limited. HCL Technologies [][***** shares closed at Rs 1,205.13 on 9 October on StockGro (NSE Rs 1,216.70), up 3.4 percent on the NSE. The NSE price is 18.1 percent above the 52-week low of Rs 1,030.00. At 18 to 19 times trailing earnings, the stock is not cheap. My view: hold, not a fresh entry, until the 12 October result. Constant-currency growth was 2.6 percent, so the rupee carries most of the reported 13.9 percent. Profit grew faster on margin, the part I trust more. But the stock rose 3.4 percent on 9 October before any print, and a 1 to 4 percent guide sets a low bar. I need constant-currency growth at or above the top of the guide, EBIT margin at or above 16.9 percent, and PERM exposure sized. Without all three, no fresh money. My exit is a close below Rs 1,176.90, the 8 October NSE close. I watch the 12 October result and any statement on the suspension’s length. Disclosure: Vijay Kumar Gupta, SEBI Registered Research Analyst, INH000020226, Vijay Gupta Advisory. SEBI registration and NISM certification do not guarantee performance or assure returns. Securities markets are subject to market risks. No holdings in the subject company.