Buy HCL Tech; target of Rs 475: R K Global

31513 Investors following HCL Tech. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy HCL Tech; target of Rs 475: R K Global

R K Global is bullish on HCL Tech and has recommended buy rating on the stock with a target of Rs 475 in its January 17, 2012 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Kajaria Ceramics; target of Rs 143: Emkay Buy South Indian Bank; target of Rs 31: Aditya Birla Money Buy ING Vysya Bank; target of Rs 491: Nirmal Bang ALSO READ See previous views by R K Global See what other Experts & Brokerages are saying about HCL Tech See messages about HCL Tech HCL Tech BSE | NSE 31/05/12 Are Mutual Funds betting on HCL Tech?

R K Global is bullish on HCL Tech and has recommended buy rating on the stock with a target of Rs 475 in its January 17, 2012 research report.

"HCL Technologies Ltd reported better-than-expected standalone revenue growth for the second quarter, showing no signs of any impact from the global economic downturn. The company gave a very robust revenue growth at ~33% at Rs21,911 mn (our forecast was at ~14% YoY growth), while it reported PAT (~73% up at Rs4,939 mn) came closure to our forecasted figure of Rs4,913 mn"

"HCL Technologies reported a very handsome revenue for the Q2FY'12 (which toppled our result expectations), over a number of strong deals in the ADM & IMS space, defying global uncertainty. The top-line was ahead of our expectation but margin expansion was slightly lower of what we were anticipating. So, overall we find a signal of positivity in terms of operational performance. But the key positive which we feel is the numbers outcome in a seasonally weak quarter (where industry marquees have expressed concerns, viz, Infosys), the company has signed 57 new client contracts and onsite volume which grew ~5.7% QoQ indicates that the second half is going to be better than what we might be factoring till this point of time. The company won 18 multiYr, multi-million dollar deals (3 USD100 mn deals) during Q3FY'12, excluding the normal contract renewals. The deal wins were across sectors like BFSI, healthcare, aerospace, logistics, telecom and manufacturing and the total contract is over USD1 bn."

"HCL Tech's second quarter EBITDAM (EBIDTA at Rs6,357 mn) fell by ~100 bps due higher foreign exchange losses due to the depreciation of the INR. It incurred forex loss of Rs758 mn in the Q, much higher than the Rs134 mn loss in Q2FY'11 & Rs179 mn loss in Q1FY'12. The company's PAT rose by a staggering ~73% YoY to Rs4,939 mn v/s our expectation of Rs4,913 mn. EPS stood at Rs7.3."

"The recent outperformance that HCL Tech has been able to put up has given us the conviction that it is only a matter of time before HCL Tech is also considered a Tier-1 player at par with the top-3. Considering its expertise in the fast upcoming IMS services which we expect to be the next best thing in the IT sector. At CMP, the stock trades at a P/E & P/BVPS of ~9.2x and ~3.6x of FY'E EPS & BVPS. We re-iterate a BUY rating, remaining affirm on our earlier TP of Rs475 (a potential upside of ~15% from current levels), factored over a P/E & P/BVPS of ~10.8x and ~4.3 using FY'13E EPS of Rs44 & BVPS of Rs112," says R K Global research report.  

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment