HCL Technologies Ltd. share price target

Q2 a miss with subdued revenue growth of 2.6% QoQ USD due to 8.4% contraction in product business

HCLT delivered a 2QFY22 revenue growth of 3.5% QoQ (CC), 40bp below our estimate. While the decline in the Products and Platforms vertical (-8% QoQ CC) due to a delay in deal closure was disappointing, Services (IT + ER&D;, 5.2% QoQ CC) came in better than expected. EBIT margin fell 60bp QoQ to 19% and was in line. The management reiterated its guidance of double-digit USD revenue growth and 19-21% EBIT margin for FY22, although it lowered its Products and Platforms growth to 0-1% (from low-single digits)....

(IoT), Block Chain and edge computing. Industry experts also believe that after having shifted their business mix aggressively towards digital, Indian IT companies are positioned well to reap benefits as spending on technology in the next decade...

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...

HCLT delivered a growth of 0.7% QoQ (CC), below our estimate of 2.4%, led by weak growth in IT Services (+0.5%) and Products & Platforms (-1%), but partially compensated by better than expected ER&D; (+4.5%). Excluding the impact of a one-time bonus in 4QFY21, EBIT margin was down 80bp QoQ and missed our estimate by 130bp due to COVID-related expenses of 90bp. The management reiterated its double-digit USD revenue growth guidance and EBIT margin band of 19-21% for FY22. New deal TCV stood at USD1.7b (+37% YoY, eight large deals) in 1QFY22....

We recommend a BUY on the stock and assign a 19x P/E multiple to its FY23E earnings of Rs 59.2/share which gives a TP of Rs 1,110/share, indicating an upside of 11% from CMP.

HCL Tech's Q1FY22 Results, Revenues to grow in double digits and margins to be in the range of 19-21% in FY2022. In line with estimates On a consolidated basis, the IT firm's net profit jumped 8.5% to Rs 3,213 crore on 2.2%...

We recommend a BUY on the stock with a target price of Rs 1,045/ share.

We have cut our estimates by 7%/4% for FY22/23E on account of 1) low revenue acceleration as compared to peers, 2) Cut in margin estimates (100bps for both years), 3) Higher ETR in FY22/23. Due to inability to maintain profitability post COVID we have reduced our target PE to 18X from 20X....