HCLTech to acquire German e-mobility tech provider for about ₹2,300 cr

HCL Technologies has signed a definitive agreement to acquire 100% stake in ASAP Group, a German automotive engineering services provider, for EUR 251.1 million (about ₹2,300 crore), according to a BSE filing. The acquisition is likely to be completed by September 2023 through an all-cash deal via the company's UK subsidiary, subject to regulatory approvals, the filing said.

HCLTech aims to expand its capabilities in the automotive engineering services segment, particularly in e-mobility, autonomous driving and connectivity in Europe, Germany and other global markets, it stated.

"Core engineering is at the heart of HCLTech's DNA and it truly differentiates our services portfolio. ASAP has developed some exciting capabilities in automotive engineering, and we share their vision for the future of mobility. This agreement will enable us to scale these capabilities and innovations across our global network," Corporate Vice President, Engineering and R&D Services at HCLTech, Hari Sadarahalli said.

Headquartered at Ingolstadt, ASAP Group was founded in 2010 and services top automotive original equipment manufacturers (OEM) and tier-1 suppliers in Germany, alongside companies in software, consulting, electrics/electronics, service testing and validation and vehicle development.

HCL Tech's Q1 earnings disappoints the street

HCL Tech reported a a 1.3% drop in constant currency revenues for the quarter, sequentially on late Wednesday. Its performance was lower than street estimates. Its underperformance in key verticals like telecom, tech and engineering R&D led to the lower revenue.

The management however expects the company to bounce back, and has maintained its FY24 guidance to grow its constant currency revenues by 6-8%. The street however was unsure of its performance and it was only the IT company that traded flat even as TCS which announced its earnings yesterday, Infosys and Wipro traded in the green.

It's EBIT margins at 17% was significantly below our estimate of 18.4%, said a morning update by Motilal OSwal which however retains a buy rating on account of attractive valuations.

"Given its capabilities in the IMS and Digital space, along with strategic partnerships and investments in Cloud, we expect HCLT to emerge stronger on the back of healthy demand for these services in the medium term," the brokerage firm said.

(With PTI inputs)