HCL Technologies-IBM Deal Fails To Enthuse Investors

HCL Technologies acquisition of some IBM products for a whopping $1.8 billion failed to enthuse investors as the market awaits greater clarity on the contours of the deal. The stock fell as much as 7.6 per cent after the deal announcement.

Analysts and industry watchers feel HCL will have to add significant capacity to be able to sell these products without the IBM banner.

“It is important to note that most of these products have been sold on the back of the stable relationship with IBM, existing Strategic Outsourcing or a Managed Services contracts and the ability to convert capex (capital expenditure) to opex (operational expenditure) thanks to IBM’s financing arm,” said Sanchit Vir Gogia, CEO at research firm Greyhound Research.

[MoneyControl.com]

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Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.

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