HCLTech secures $2.1 billion deal from Verizon; stock zooms over 3%

11 Aug 2023 , 10:32 AM

On August 10, HCLTech announced a $2.1 billion agreement with Verizon Business to provide managed network services to its global commercial customers.

Following a slow April-June quarter performance, this transaction will be a shot in the arm for the country’s third largest IT services provider.

In early trade on Friday morning, the IT giant’s share price was up 4.5% at Rs 1,186.95.

At around 10.17 AM, HCLTech was trading 3.39% higher at Rs 1,172.75 per piece, against the previous close of Rs 1,134.30 on NSE.

HCLTech’s contract wins remained at $1.56 billion as of Q1FY24, a considerable decrease from its $2 billion plus order book in the preceding seven quarters.

We believe that this deal will have a positive revenue impact over the next six years beginning in November 2023, with an estimated new total contract value of $2.1 billion over the term, HCLTech said in a press release.

Verizon’s networking strength, solutions, and scale will be integrated with HCLTech’s managed service skills in this agreement to provide large-scale wireline service delivery for enterprise customers.

According to the company’s press release, Verizon will oversee all ‘customer acquisition, sales, solutions, and overall planning and development with its customers,’ while HCLTech will lead post-sale installation and continuing support.

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