HCL Technologies at PPFCF

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HCL Technologies Limited is among the periodic Indian-IT-services holdings of the Parag Parikh Flexi Cap Fund (PPFCF). The position has appeared in PPFCF factsheet portfolio listings across multiple cycles, alongside other technology-sector holdings such as Infosys at PPFCF, TCS at PPFCF and Persistent Systems at PPFCF.

The HCL Technologies thesis combines several elements of the broader PPFAS investment philosophy. First, mid-tier IT differentiation: HCL has historically had a different service mix from the top-two Indian IT companies (TCS and Infosys), with a higher share of infrastructure services and a distinct products-and-platforms business through HCLSoftware. Second, products portfolio: HCL’s acquired and proprietary software products (BigFix, AppScan, Commerce Cloud, Domino, Connections, Notes and several others, including a portfolio acquired from IBM in 2018) provide a recurring-revenue stream that is less common among Indian IT-services peers. Third, disciplined valuation-driven entry that has produced multi-period holding patterns.

The position is also a useful illustration of PPFAS value investing applied to a mid-tier Indian IT-services franchise. HCL has typically traded at a valuation discount to TCS and Infosys, providing room for either re-rating or higher operational upside. PPFAS’s willingness to look across the IT-services tier supports diversified exposure within the same broad sector.

This article documents HCL Technologies’ role in PPFCF: the company background, the investment thesis articulated by Rajeev Thakkar and Raunak Onkar, the position history across multiple factsheet cycles, recent positioning, and the comparison with peer holdings.

Company background

HCL Technologies Limited was founded in 1976 by Shiv Nadar and a group of co-founders, originally as the Microcomp division of HCL (Hindustan Computers Limited) focused on hardware and electronics. The IT services business was carved out and listed in 1999 as HCL Technologies Limited. The company is the listed flagship of the broader HCL group and a sister company to HCL Infosystems (hardware and distribution).

HCL Technologies provides IT services across application services, engineering and research and development (R&D) services, infrastructure services, and digital and analytics. The company has three operating divisions: HCL Services (consulting and traditional IT services), HCL Software (products and platforms) and HCL Engineering R&D Services (industrial engineering and embedded software). The 2018 acquisition of select IBM software products (including AppScan, BigFix, Commerce, Connections, Digital Experience, Notes and Domino, Unica and Z-collateral) for approximately USD 1.8 billion significantly expanded the HCLSoftware business.

The company’s equity shares are listed on the National Stock Exchange and the Bombay Stock Exchange and are constituents of the Nifty 50 and the Sensex. The official corporate website is hcl.com and the IT-services-specific site is hcltech.com. The registered office is at NOIDA, Uttar Pradesh.

Roshni Nadar Malhotra serves as Chairperson of HCL Technologies. The company is professionally managed by a chief executive officer reporting to the board.

For Indian retail investors, exposure to HCL is straightforward through direct equity purchase on the NSE/BSE or through diversified equity mutual fund schemes. PPFCF’s exposure delivers indirect ownership through a SEBI Mutual Funds Regulations 1996 registered scheme.

Investment thesis at PPFCF

The PPFAS thesis on HCL Technologies has been articulated across monthly factsheets and at the PPFAS Annual Unitholders Meet. The argument rests on several pillars.

First, PPFAS margin of safety. HCL has typically traded at a price-to-earnings multiple discount to TCS and Infosys, providing valuation-driven entry attractiveness. The team has built or added to the position during compression windows.

Second, differentiated service mix. HCL’s infrastructure-heavy mix and engineering and R&D services franchise distinguish it from the more application-and-consulting-focused TCS and Infosys. Engineering and R&D services is one of the higher-growth segments within Indian IT-services and HCL has the largest such franchise.

Third, HCLSoftware products business. The recurring-revenue nature of the products business (subscription and maintenance fees on AppScan, BigFix, Commerce Cloud, Digital Experience, Domino, Notes and other portfolio elements) provides cash-flow predictability that is less common among Indian IT-services peers. The HCLSoftware business is operated as a separate unit with its own go-to-market strategy.

Fourth, balance-sheet quality and dividend yield. HCL has historically maintained a net-cash balance sheet and a higher dividend payout ratio than TCS and Infosys, with yields in the 3 to 4 per cent range during compression periods. For a tax-aware fund operating under PPFAS tax-aware portfolio management doctrine, the yield component meaningfully contributed to total return.

Fifth, PPFAS focused portfolio discipline. HCL meets the team’s quality bar through its market position, balance-sheet strength and diversified service mix.

Position history

HCL Technologies has appeared in PPFCF disclosures across multiple periods. The position has been mentioned in PPFCF factsheet portfolio listings as one of the recurring Indian holdings within the IT-services cluster.

Through the 2018 to 2022 window the position fluctuated with IT-services cycles. The COVID-19 pandemic produced strong upcycles in 2020 and 2021. The 2022 to 2024 deceleration in global enterprise technology spending produced multiple compression that the team has typically interpreted as an entry window for value-oriented IT positions.

The February 2022 SEBI MF overseas investment cap freeze created a structural pivot in which domestic positions received continued allocations.

By 2025 and into 2026 the position continued as a periodic significant holding within the broader PPFCF portfolio, though it did not enter the top three (which by April 2026 was HDFC Bank at PPFCF, Power Grid Corporation at PPFCF and Coal India at PPFCF).

Recent positioning

The April 2026 factsheet, with PPFCF AUM at Rs 1,40,949 crore (up 9.29 per cent month-on-month from Rs 1,28,966 crore in March 2026), continued to include HCL Technologies within the recurring domestic holdings list. The May 2026 commentary on PPFCF carrying around 18 to 22 per cent in PPFAS cash holdings reflected broader valuation caution.

In monthly factsheet commentary, Rajeev Thakkar and Raunak Onkar have referenced HCL’s engineering R&D franchise, the HCLSoftware products business and the broader Indian IT-services demand trajectory as supports for continued holding.

Comparison with peer holdings

Within PPFCF’s Indian-IT-services cluster, HCL Technologies sits alongside Infosys, TCS and Persistent Systems. Compared with TCS and Infosys, HCL typically trades at a price-to-earnings discount, offers higher dividend yield and provides differentiated exposure through HCLSoftware and engineering R&D services. Compared with Persistent Systems, HCL provides large-cap scale rather than mid-cap engineering-services exposure with a different services-versus-products mix.

The cluster of four Indian IT-services holdings provides PPFCF with diversified exposure across delivery models, client verticals and price points within the same broad sector. This is consistent with the PPFAS focused portfolio doctrine.

Compared with international anchors Alphabet at PPFCF, Microsoft at PPFCF, Amazon at PPFCF and Meta Platforms at PPFCF, HCL provides exposure to enterprise technology services and software products. The combination of Indian-IT-services and US-technology platforms provides multi-layered exposure.

Within the broader PPFAS focused portfolio framework, HCL Technologies is grouped with ITC at PPFCF, the banking cluster (HDFC Bank, ICICI Bank, Kotak Mahindra Bank at PPFCF), the consumer-discretionary cluster (Maruti Suzuki at PPFCF, Mahindra and Mahindra at PPFCF, Bajaj Holdings at PPFCF) and the PSU contrarian positions as anchor Indian holdings.

Context within PPFCF

PPFCF was launched on 24 May 2013 as Parag Parikh Long Term Value Fund (PPLTVF), renamed Parag Parikh Long Term Equity Fund on 16 February 2018 and renamed Parag Parikh Flexi Cap Fund on 13 January 2021. The scheme is benchmarked against the Nifty 500 TRI and has delivered a compound annual growth rate since inception of approximately 19.06 per cent against a category average of 15.22 per cent and the Nifty 500 TRI at 12.4 per cent. AUM crossed Rs 1 lakh crore in May 2025, making PPFCF the first active equity mutual fund scheme in India to do so, and rose to roughly Rs 1.6 lakh crore by 15 May 2026.

The fund is managed by Rajeev Thakkar along with Raunak Onkar, Raj Mehta, Rukun Tarachandani and other team members. Parag Parikh, the founder of the Parag Parikh Financial Advisory Services Limited sponsor entity, established the investing house in 1979 and incorporated PPFAS Ltd in December 1992. The mutual fund was set up with SEBI on 10 October 2012 under registration ID MF/069/12/01.

HCL Technologies has been a recurring topic at the PPFAS Annual Unitholders Meet. The 12th edition was held on 22 November 2025 at Birla Matushree Sabhaghar in Mumbai.

See also

External references

References

  1. PPFAS Mutual Fund, October 2025 factsheet, amc.ppfas.com.
  2. PPFAS Mutual Fund, March 2026 factsheet, amc.ppfas.com.
  3. INDmoney, “PPFAS Flexi Cap April 2026 portfolio update,” indmoney.com.
  4. Angel One, “Parag Parikh Flexi Cap Fund crosses one lakh crore AUM,” angelone.in.
  5. Business Today, May 2026 cash commentary, businesstoday.in.
  6. HCL Technologies Limited, Annual Report 2024-25, hcltech.com.
  7. NASSCOM Strategic Review.

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