Close race between TCS and HCL Tech for second place in IT pecking order: Pankaj Sharma, Equirus Securities

In a chat with ET Now, Pankaj Sharma, Equirus Securities, says looking at the business mix of HCL Tech, in terms of verticals, in terms of geographies, it is going to be a bit of challenge for them . Edited excerpts



ET Now: I only have the PAT number right now, unfortunately I do not have the revenue numbers but Rs 1953 crore is slightly better than what we were working with at least?

Pankaj Sharma: Yes, I think it is more or less okay. I think more important numbers for IT companies would be the revenue growth number and unless we have visibility on that it is very difficult to comment, specifically on the results but I think PAT number is largely okay so I would not be too unhappy with that.

ET Now: Now that we have heard from the big four, TCS, Infosys, Wipro and HCL Tech, rate the sector for me 1,2,3,4,5?

Pankaj Sharma: See, I think definitely number one would be Infosys because what they have delivered and what they are guiding for is definitely much ahead of competition. There would be let us say a close tie between TCS and HCL Tech for number two. I would think that TCS is slightly ahead because of the visibility and because of the size which they have. Wipro is definitely a laggard and still some time before we can see the impact of change in management. So overall, I think the pecking order is Infosys, TCS, HCL Tech and then Wipro.

ET Now: Their main business which is the infrastructure vertical that is growing; however, constant currency is growth. They are not firing full cylinders in the European business as well. So the initial reaction was that these are good set of numbers but if I look at the fine print, devil is always there in the detail. It is not all that sugar coated. It is not all that great. I mean traders are unlikely to jump with lot of joy based on these numbers. I am sure you will not be forced to upgrade your earning estimates for HCL Tech the way you did for Infosys.

Pankaj Sharma: I agree because I think what has happened with Europe that has been a problem and it is impacting them quite significantly. So if you look at these two numbers, the infrastructure services growth and then in conjunction with what is happening on the constant currency growth for the company, I think it looks disappointing because if you are growing at around 4 per cent for infrastructure services, 1.7 per cent is definitely a disappointing number. Overall, I think that if you look at the business mix which they have in terms of verticals, in terms of geographies, I think it is going to be a bit of challenge for them to grow much faster because the base situation is in many of these verticals in the geographies like Europe, it is not going to be that easy despite them doing very well in infrastructure services. This will be a challenge and I think that would be a problem for HCL Tech going forward.