HCL Technologies Limited provides software development business process outsourcing, information technology and infrastructure services. The company is spread across 49 countries with 150,000+ employees and its...

a growth of 1%QoQ and -5%YoY. However, the Mode 2 services [(services that helps enterprise take the next digital leap) (accounts for 22.7% of HCL's revenue)] registered strong growth of 13%QoQ and 28%YoY. Similarly the Mode 3 services [Innovative IP's to help enterprises to be future ready) (or 16.3% of revenue)] registered a growth of 8%QoQ and 6%YoY....

We recommend BUY and assign 16x P/E multiple to its FY23E earnings of Rs. 59.8 per share which gives a TP of Rs. 1,136 per share, an upside of 15%.

13 large deals of size $25mn+ closed this quarter (+13% YoY). Pipeline remains strong with possibility of accelerated booking in coming quarters. HCLT's revenue growth of 3.5% QoQ CC (Ple 3.4% & Cons: 2.7%) & 4.4% USD...

HCL Technologies (HCLT) delivered strong revenue growth (3.5% QoQ CC) in 3QFY21, above our expectation and its guidance, led by stronger than expected seasonality in the Products and Platforms vertical (P&P;, +8.3% QoQ in CC) and continued traction in Mode 2 services (+10.9% QoQ in CC). We expect HCLT to return to mid-teens growth in FY22 (14% YoY in CC USD) as continued strength in P&P; due to improving deal wins and new client additions complements improving demand environment in IT Services and R&D; verticals. The P&P; business should deliver low teen USD revenue...

Our target price is Rs 1,110 at 18x Dec-22E (15% EPS CAGR over FY21-23E). HCL Technologies: We maintain BUY on HCL Tech (HCLT), based on solid 3Q and a strong outlook across multiple growth vectors. Large deal momentum (>13% YoY and 13 transformational deals >USD25mn TCV in 3Q) and pipeline at nearly an all-time high (many USD 200-300mn deals) supports the growth outlook. Operational highlights include offshore-led improvement in ER&D; and IT & Business services margins and continuity in strong cash generation with OCF/EBIT at 114% (119% in 2Q). P&P; business traction (>14,000 customers 6,000 sales transactions across new and renewals) is expected to continue (beyond 4Q weak seasonality), supported by new product releases (15+ in 3Q), strong deal activity (USD 91mn net new license bookings) and more cross-sell/up-sell transactions across products/services. The absence of large acquisitions and subsequent accretion to FCF/payout are upside risks to valuations.

Tepid 4Q guidance not different from that of Infosys'; Products look up HCL Technologies (HCLT) delivered above-guidance revenue growth and margins for 3QFY21. Revenue grew by 3.5% CC QoQ (guidance was 1.5-2.5%) and EBIT margin came in at 22.9%, which was an outsized beat versus our estimate of 21%. The 1-month run-up of ~16% in the stock price was likely factoring in a bigger beat, especially after superlative 3Q of TCS and Infosys. The 2-3% QoQ guidance of 4Q (including 1% from DWS acquisition) was a tad disappointing in the context of high expectations, but in line with the 0-2% implied guidance of Infosys. TCV growth of 13% (all of it net new) is in line with that of TCS (total TCV), but tepid compared to scorching 10x growth...

HCL Tech (HCLT) reported 4.4% QoQ dollar revenue growth in Q3FY21, outperforming our 3.2% estimate.

Rising adoption of smartphones, high internet speed and social distancing (due to Covid-19) has changed consumer behaviour. Consumers now prefer to transact (buy a product) virtually over the smartphone via an app instead of physical transaction. This has led to virtualisation of business models. In addition, to keep business up and running in a work from home scenario, technology is gaining traction. As a result, new age technologies like cybersecurity (to protect business from work from home scenario), app development (to help customer transact virtually) and Cloud (to enable...

HCL Technologies Ltd (HCL Tech) reported strong broad based growth in Q2 FY21, revenue stood at Rs. 18,594 crs up 4.5% QoQ and 6.4% QoQ in CC terms. Operating margin expanded by 108 bps at 21.6% than previous quarter aided by strong execution, higher utilization and lower travel cost.

Federal Bank: We maintain a BUY on FB with a target price of Rs 78 (1.0x Sept-22E ABV). FB's PPOP grew strongly, led by an uptick in NIMs and core fees. However, a sharp (prudent) rise in non-tax provisions dragged net earnings. Despite the improvement in operating performance and positive commentary on collections, our earnings estimates are mostly unchanged, as we conservatively factor in higher provisions. Attractive valuation and a strong liability franchise underpin our stance. HCL Technologies: We maintain BUY on HCL Tech (HCLT), based on broad-based 2Q performance and multiple growth vectors. HCLTs prowess in cloud infra business is a strong competitive advantage with enterprises accelerating cloud adoption and higher annuity streams supported by P&P; upside. The positive outlook is also predicated on (1) strong deal wins with TCV up 35% QoQ, supported by 15 transformational wins (eight in life-science & healthcare vertical) and pipeline at an all-time high, (2) strengthening partner ecosystem with hyperscalers increasing the addressability and client access, (3) continued traction in P&P; business with cross-sell opportunities (>12,000 unique customers signings), supported by upgrades/launches (Unica/DRYiCE in 2Q). The absence of large acquisitions and subsequent accretion to FCF/payout are the upside risks to valuations. HCLT is among our top picks in the sector, and our target price of Rs 970 is based on 18x Sep-22E EPS.

HCL Tech (HCLT) reported 6.4% QoQ USD growth coming from mid-high single digit recovery across verticals.

HCL Tech announced that it is going to acquire DWS group headquartered in Australia for AU$ 158.2. The deal will likely close till December 2020. HCL Tech has strong a foothold in geographies like North America and Europe

Mid-quarter update raises revenue and margin guidance for Q2FY2021, driven by better-than-expected execution, pick-up in discretionary spends that were held up, and return of normalcy in certain pockets. Given strong capabilities in IMS, HCL Tech would continue to win consolidation deals with...