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HCLTech analysts do not see material gains from latest acquisition, find stock expensiveAs part of the transaction, nearly 1,500 engineering and telecom specialists from 39 countries will join HCLTech’s global delivery team. The acquisition is structured as an asset carve-out and does not involve the purchase of shares. The consideration will be entirely in cash.By Jomy Jos Pullokaran   |  Hormaz Fatakia   December 19, 2025, 7:57:02 AM IST (Updated)3 Min ReadIT services company HCLTech Ltd on Thursday (December 18) said it has signed an agreement to acquire the telco solutions business of Hewlett Packard Enterprise (HPE) to strengthen its engineering and AI-led network propositions for global communication service providers (CSPs).

The acquisition follows an earlier transaction completed in 2024, through which HCLTech acquired certain assets from HPE’s Communications Technology Group. With this agreement, HCLTech will add industry intellectual property, product engineering and R&D talent, and client relationships with leading global CSPs.

The telco solutions business supports more than one billion devices across over 200 deployments worldwide and enables operations support systems, home subscriber server, and 5G subscriber data management, along with AI-led closed-loop network automation.

Also Read: HCLTech Q2 Results: Revenue up 10.7% year-on-year, EBIT margin and revenue guidance unchanged

As part of the transaction, nearly 1,500 engineering and telecom specialists from 39 countries will join HCLTech’s global delivery team. The acquisition is structured as an asset carve-out and does not involve the purchase of shares. The consideration will be entirely in cash.

The total purchase price is up to $160 million, including $15 million of incentives linked to FY25 performance. The transaction is subject to regulatory approvals across countries, including approval from the Committee on Foreign Investment in the United States, and is expected to close in approximately six months from signing.

HCLTech said it will leverage the expanded engineering capability and acquired intellectual property to accelerate 5G network transformation, network cloudification, network as a service, autonomous networking, service management and orchestration, AI-led network automation, and AI-native networks for global CSPs.

Also Read: HCLTech shares could see further upside, analysts reassured after Q2 results

Brokerage firm Kotak Institutional Equities has maintained its "reduce" rating on HCLTech with a price target of ₹1,500. It said that the company's focus on value acquisition continues.

While HCLTech has not shared financials of the acquired company, back-of-the-envelope calculations suggest the cost to be 1% of the overall estimated revenue of HCLTech for the current financial year, Kotak added.

At 23.5 times financial year 2027 estimated price to earnings, the brokerage finds the stock to be expensive.

Morgan Stanley has also maintained its "equal-weight" rating on HCLTech with a price target of ₹1,680, stating that it does not see any significant financial impact of this acquisition for HCLTech.

47 analysts have coverage on HCLTech, of which 25 have a "buy" rating, 14 say "hold", while eight have a "sell" recommendation on the stock.

Shares of HCLTech ended 0.5% higher on Thursday at ₹1,663. The stock is down 13% so far in 2025.

Also Read: Accenture Q1 revenue up 6% to $18.7 bn; AI bookings surge 76%Continue Reading(Edited by : Shoma Bhattacharjee)First Published: Dec 18, 2025 9:00 PM ISTTagshcltechshare market today