HCL Technologies Ltd. share price target

HCLT delivered an exceptionally strong revenue growth of 7.6% QoQ CC in 3QFY22, 310bp above our estimate, led by its troubled Products and Platforms (P&P, +24.5% QoQ) vertical, which did exceptionally well despite benefitting from seasonality and deal spill over from 2QFY22 (600bp impact). Its Services verticals (IT Services/ER&D up 4.7%/8.3% QoQ CC) continued to clock strong growth and was ahead of our estimate. HCLT reported strong new deal TCV of USD2.1b (flat QoQ, +64% YoY). EBIT margin at 19% (flat QoQ) missed our estimate by only 40bp, but was...

HCL Tech (HCLT) reported stellar growth of 6.7% QoQ USD, beating our estimate of 3.5%

Strong headcount addition (+23% YoY) over last four quarters and lower attrition compared to Tier-1 peers, indicate well prepared supply side engine. HCLT is well positioned to deliver strong growth in IT Services and ER&D given 1) improving deal TCV, 2) broad-based nature of growth across service lines with ability to win integrated apps+infra deals, 3) improving client metrics, 4) investments in digital engineering and 5) strengthening of sales...

We expect the robust performance in HCL's Services business, especially the ER&D vertical, to continue as the demand environment remains favorable. We also draw comfort from improving management commentary on continued growth momentum in the IT Services business. Sustainable demand momentum for Cloud and Digital Engineering benefits HCLT, given its large presence within IMS and ER&D and continued investments in capabilities. Strong headcount additions and deal wins reflects the management's confidence on a sustainable growth momentum....

HCL Technologies Limited provides software development business process outsourcing, information technology and infrastructure services. The company is spread across 49 countries with 170,000+ employees and its...

Net sales (including other operating income) of HCL Technologies has increased 2.93% to Rs 20655 crore. Operating profit margin has declined from 25.22% to 24.31%, leading to 0.79% decline in operating profit to Rs 5,022.00 crore. Purchase of finished goods cost fell from 1.61% to 1.32%. Employee cost increased from 53.29% to 53.38%. Other expenses rose from...

We recommend a BUY on the stock and assign a 21x P/E multiple to its FY24E earnings of Rs 65.8/share which gives a TP of Rs 1,390/share, indicating an upside of 11% from CMP.

Revenue growth guidance of double digit maintain for FY22 Revenue growth of 2.6%/11.3% QoQ/yoY in US$ and +3.5%/10.5% in CC driven by strong growth across services portfolio led by digital business, engineering and cloud services. EBIT margin of 19% -60bps QoQ. Mode-2 solutions(25.8% of revenue) continued to lead the growth, +12.5%/36.3% QoQ/YoY in CC. Amongst verticals, growth was led by Lifesciences & Healthcare (15.3% of revenue) grew by 7%/20.1% QoQ/YoY in CC. US$5100 mn+ clients increased by 1 QoQ to 15. LTM attrition increased to 15.7% vs 11.8% sequentially. HCLT secured 14 large deals during the quarter at US$2.24bn up by...

4.4%) led by decline in Products (P&P;) business (-8.8% QoQ CC, ~12% of revenue) due to slippages in contract closures. Q3 being seasonally strong quarter for P&P; management expects some portion of contract deferments to close in Q3. Management has given guidance of 0-1% YoY CC for Product business which translates average growth of 5% QoQ USD in next 2 quarter to deliver growth of 0.2% YoY in P&P.; IT services (+4.1% QoQ USD) & ER&D; (+5.3% QoQ USD) reported strong growth after muted last quarter. Growth in...