HCL Technologies Ltd. share price target

Reported revenues stood at $3,364 million, down 1.6% q-o-q/ up 5.6% y-o-y in constant currency (CC) terms, owing to softness in services though it beat our estimates of $3,359 million.

We recommend a BUY rating on the stock and assign a 19x P/E multiple to its FY26E earnings of Rs 83/share to arrive at a TP of Rs 1,550/share.The TP implies an upside of 15% from the CMP.

Revenue growth guidance of 3-5% for FY25, likely to be similar to FY24

HCL Technologies concluded FY24 with a weak performance. Its revenue growth fell short of our estimates by -2.4%. This was primarily attributed to decreased revenue from the ER&D and Software segments.

We recommend a HOLD rating on the stock and assign a 19x P/E multiple to its FY26E earnings of Rs 80.3/share to arrive at a TP of Rs 1,550/share. The TP implies an upside of 5% from the CMP.

HCL Technologies (HCLT) reported weak 4QFY24 performance with 0.3%
QoQ CC consolidated revenue growth, below our estimate of 0.9% QoQ CC.
The weak performance was due to the seasonality in HCL Software (-18.5%
QoQ CC) coupled with weakness in ERS (1.6% QoQ CC), while ITBS posted an
impressive 4% QoQ growth in CC

HCLT reported revenue growth and EBIT margin in line with our estimates. IT and business services grew 4% QoQ CC and Engineering R&D was down 1.6%. Software business was down 18.5% QoQ CC on seasonal weakness.