HCL Technologies Ltd. share price target

Q1 revenue growth was driven by a 16.5% QoQ growth in IMS (~40% of revenue) which included ~7% benefit from consolidation on Volvo's external IT business. HCLT has entered into an IP partnership (at least for 15years) with a global Technology major for Workload Automation and DevOps solutions. It would invest US$350mn over two years and expects revenue of US$30-40mn in FY17 from this partnership....

Inorganic and organic contributions from Volvo drive revenue: HCL Technologies' (HCLT) 1QFY17 constant currency (CC) revenue grew 6% QoQ, above our estimate of +5%. Growth was driven by the acquisition of Volvo's external IT division, which...

HCLT's revenue growth was the highest among top-tier IT firms, albeit almost entirely led by IMS. However, this is not a new phenomenon, as historically its revenue growth has been skewed towards this business, which is the second-largest after TCS. Notably, 97% of HCLT's incremental revenue was contributed by IMS in 1QFY17. The Software Services segment remains growth-challenged, as cannibalisation of onpremise revenue by cloud pressurises Application Services, in our view. Steep 16% sequential decline in BPO revenue is another disappointment. On the vertical front, the key growth drivers i.e. Manufacturing, Retail & CPG, and Public Services accounting for 55% of HCLT's total revenue sequentially grew by 12.6%, 15.8% & 12.3%,...

After this quarter (3QFY2016), the company has migrated to March year-ending. For 3QFY2016, HCL Technologies (HCL Tech) posted lower than expected numbers on the top-line as well as the bottom-line front. It reported a top-line growth of 1.3% QoQ to US$1,587mn V/s US$1,607mn expected. In constant currency (CC) terms, the growth was of 1.7..

HCLTs results barely lived up to the Street?s expectations. Nevertheless, we are confident about the company?s IMS and engineering services, and expect growth to pick up. A healthy deal pipeline of US$ 2bn TCV in 3Q bolsters our faith in HCLT. Most of the deals include IMS in various stages of transition. We expect FY17 to be a stronger year led by IMS.

ICICI Securities Ltd | Retail Equity Research HCL Tech reported muted Q3FY16 quarterly earnings as dollar revenue growth and EBIT margins were below our estimates...

Revenue grew 1.3% qoq in USD and 1.7% in CC (constant currency) implying cross currency impact of 40bps lower than our as well as street estimates. Verticals: Healthcare/Energy grew 6.3%/6.1% qoq while Telecom grew 3.4%....

Background: HCL Tech is the 4th largest IT services exporter offering offshore IT Services with revenues of INR 311.36bn (9MFY16). In 3QFY16: Revenue split, Americas: 62.5%, Europe: 28.4% & ROW: 9.1%. Service Mix: Application development & maintenance: 39.9%, Infrastructure Services: 36.2%, Engineering and R&D; services: 18.7% business process management: 5.2%. Fixed price contracts account for 56.8%, while time and material 43.20%. Major verticals are Manufacturing: 31.4%, Financial Services: 25.0%, Healthcare: 12.8%, Retail and CPG: 9.2%, Media: 9.90%, Public Services: 11.1% & others: 0.5%. Company...

Revenue traction remains tepid: HCLT's constant currency revenue growth of 1.7% QoQ missed our estimate of 3%. At 20.7%, EBIT margin expansion of 70bp QoQ was nearly in line with our estimate of 21.2%. PAT is INR19.3b, +0.3%...