HCL Technologies Ltd. share price target

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...

Revenue at Rs.17,841crores; down 4.0% QoQ & up 8.6% YoY, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) margin at 25.6%, Earnings Before Interest and Taxes (EBIT) margin at 20.5% and Net Income at Rs.2,931 crores ; down 7.3% QoQ & up 31.43%YoY The Company's revenue in constant currency was down 7.2% QoQ & up 1% YoY. HCL said it expects revenue to increase QoQ by an average of 1.5% to 2.5% in constant currency for the next 3 quarters. It expects operating margin between 19.5% and 20.5% for FY21. On a sequential basis, net profit declined 7.3% and revenue fell 4% in Q1 June 2020 over Q4 March 2020. Consolidated EBITDA fell 3.3% to Rs 4566 crore in Q1 June 2020 over Q4 March 2020....

HCL Tech a reported steady set of results in Q1 FY21. Revenue for the period of Q1 FY21 stood at Rs. 17,841 cr decline by 4% QoQ much in line with the expectations. Operating margin reported a strong growth of 250bps and stood at 25.6%. Net income declined by 7.3% QoQ and stood at Rs. 2925 cr.

HDFCB: Strong enough to weather the storm. HCLT: Upbeat margin outlook

HCLT OCF generation was strong in this quarter (US$2.3bn vs US$1.3bn avg) post making the pending payment of IBM ($812mn), Net cash is US$ 1,330mn. HCLT generates ~US$1.7bn over the next 2-3 years & with limited capex &...

HCL Technologies' (HCLT) Q1FY21 revenue decline of 7.2% QoQ in CC was in-line with our forecast of a decline of 7.8%. However, HCLT was able to limit the decline in EBIT margin to 40bps QoQ to 20.5% (vs. our forecast of 19%) through its cost saving initiatives. EPS of Rs10.8, -7.3%/+31.6% QoQ/YoY was also beat to our forecast. HCLT has reinstated its FY21 guidance with revenue CQGR of 1.5% to 2.5% in CC, implying -2.3% to -0.8% YoY decline for FY21, and EBIT margin of 19.5% to 20.5%. We largely maintain our FY21/22 revenue forecast and increase EBIT margin forecast by 100bps/25bps to 19.8%/20.2%. We also increase FY21/22E EPS by 5.9%/6.6%. We...

18 July 2020 HCL Technologies (HCLT) reported EBITDA margin expansion (+20bp QoQ) despite the COVID-19 disruption, which is impressive. Notably, it had reported margin expansion even in 4QFY20, when most other large companies had witnessed contraction. A decent increase in net new deal wins and a robust deal pipeline (+40% QoQ) comfort us. HCLT surprised us by reinstating revenue growth (+1.52.5% CQGR, CC) and EBIT margin guidance (19.520.5%). Maintain HCLT to better navigate the current crisis and emerge stronger on the back of an expected increase in enterprise demand for Digital Services. HCLT reported revenue (CC) / EBIT / PAT growth of 1%/30%/32% YoY v/s our estimate of 1%/17%/19% YoY. Revenue decline was in-line with estimates. As expected, Engineering Services (-9% QoQ, CC) was the biggest overhang on revenue this quarter. While the IT & Business Services segment declined ~8% QoQ (CC), the Products & Platforms business remained resilient (-2% QoQ, CC).

HCL Tech reported largely in-line revenue performance, while EBIT margin and net profit beat our estimates. Constant currency (CC) revenue declined 7.2% q-o-q, broadly in-line with our estimates, owing to supply-side constraints due to COVID-19 (1/3rd of total revenue impact from COVID) and reduction of revenue from offshoring of a large deal. IT and business services (down 7.8% q-o-q CC) and engineering R&D; (down 9% q-o-q CC) were the key drags on revenues owing to exposure to troubled verticals and asset heavy industries. EBIT margin contracted 36bps q-o-q to 20.5%, beating our estimates, owing to increased amortisation due to...

HCL Tech (HCLT) reported a sharp 7.2% QoQ CC topline decline but resilient EBIT margins of 20.5% in Q1FY21.

We recommend a BUY on HCL Tech with a Target Price of Rs 600, an upside of ~7% from CMP of Rs. 562 and Stop Loss Rs 530.