HCL Technologies on Wednesday posted a stellar set of first quarter FY17 numbers, surprising the Street. Most analysts maintain their bullishness on the stock.
HCL beat analysts' expectations on all parameters by reporting 6 percent growth each in profits at Rs 2,055.2 crore and revenues at Rs 11,336 crore on a sequential basis. Dollar revenues grew by 6.5 percent to USD 1,691 million on QoQ basis, which was expected at USD 1,678.5 million.
In terms of their guidance, too, they have surprised the Street. They expect FY17 revenue growth in range of 12-14 percent in constant currency terms and operating margin (EBIT) in range of 19.5-20.5 percent. In dollar terms they expect to do around 12-13 percent, which is even higher than NASSCOM's guidance.
The only worry so far has been a bit of degrowth seen in financial services business.
Karan Taurani, Senior Analyst, Dolat Capital says, the stock has been their top pick in the sector and will remain so. They would definitely revise their earnings guidance upwards of 3-5 percent, he says.
The house has a hold on the stock and their current price target on the stock is Rs 950. Taurani says HCL Tech and Infosys will be the growth leaders in the space.
Rahul Jain,Vice President, Systematix Shares & Stocks already has a price target of Rs 1000 crore, which they are likely to revise slighly upwards.
He is very happy with their margins performance and FY17 guidance visibility and thinks investors will be turn positive on the stock post this numbers.
Although Sandip Agarwal, VP Wholesale Capital Markets, Edelweiss Financial Services is also very upbeat on the stocks, he thinks Infosys will be the best performer in the IT space. However, the house has been bullish on HCL Tech with a target price of Rs 1065, says Agarwal.
Overall, the deal win trajectory is good with steady growth in USD 100 million deals and accelerated growth in USD 50 million.
For the entire analysis of HCL Tech's Q1 numbers, watch video.
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