HCL Technologies Ltd. share price target

FY22 new deal TCV is $8.3 bn, 14% YoY and ACV is higher by 21% YoY. target price to Rs. 1169 (earlier Rs. 1295) led by 1) decline in margin profile, increase in risk free rate and 4) moderation in terminal growth rate. We cut...

HCLT delivered a revenue growth of 1.1% QoQ CC in 4QFY22 (inline), with a strong growth in Services (+5% QoQ CC). However, the same was dragged down by its troubled Products and Platforms (P&P, -24% QoQ) vertical due to seasonality. It reported a good new deal TCV of USD2.26b (+6% QoQ). EBIT margin at 17.9% (-110bp QoQ) was in line, with a 180bp hit in the P&P business partially offset by an 80bp improvement in Services' margin. The management had initially guided at a FY23 revenue growth of 12-14%. It lowered its margin guidance to 18-20% (as against 19-21% guided in FY22)....

We recommend a BUY rating on the stock and assign a 20x P/E multiple to its FY24E earnings of Rs 67.4/share to arrive at a TP of Rs 1,345/share, indicating an upside of 22% from the CMP.

Q4 revenue growth of 0.5% QoQ USD underperformed our estimate owing to a double-digit slowdown in Mode-3 business

HCL Technologies Ltd. provides software development business process outsourcing, information technology and infrastructure services. Company is spread across 52 countries with 197,000+ employees and its client base,...

Net sales (including other operating income) of HCL Technologies has increased 8.11% to Rs 22331 crore. Operating profit margin has declined from 24.31% to 24.15%, leading to 7.39% rise in operating profit to Rs 5,393.00 crore. Purchase of finished goods cost rose from 1.32% to...

We recommend a BUY on the stock and assign a 24x P/E multiple to its FY24E earnings of Rs 67.4/share which gives a TP of Rs 1,600/share, indicating an upside of 20% from CMP.

QoQ CC) and IT Services (+4.7% QoQ CC) also reported strong growth. Strong new deal TCV of US$2.135 bn +64% YoY, strong deal pipeline (~10% QoQ, 20% YoY), continued strong headcount addition (+5.4% QoQ, 24% YoY) indicates IT Services and ER&D growth momentum will continue. Miss in EBIT margin at 19.0%, flat QoQ (Ple:19.3%, Cons:19.4%) was led by decline of 190bps QoQ in Services (IT + ER&D) margins due to wage hikes, supply side cost pressures, new project transition costs and seasonal leaves. This was offset by higher P&P margins (32%) led by revenue growth leverage....