HCL Technologies rallied about 3 percent on Thursday morning and was also the top Sensex gainer after global investment firm BofAML upgraded the stock.
BofAML revised its rating on the stock to 'buy' from 'neutral' and hiked its target price from Rs 1,060 to Rs 1,250 which translates into an upside of nearly 20 percent from current levels.
The stock has been on investors’ radar - it has rallied by about 9 percent so far in 2019 and a little over 10 percent in the last three months.
The global investment bank expects the organic revenue growth rate to improve in 2019-20. The stock is poised to gain from the large deal intake and lower portfolio drag.
The global investment bank sees stable margin on accretion from software products in the next financial year. The 2019-20 revenue guidance implies an uptick in organic growth rate.
In the December quarter results, HCL Tech has maintained its full-year constant currency revenue growth guidance at 9.5-11.5 percent and EBIT margin expansion forecast at 19.5-20.5 percent.
The country's fourth largest IT company reported 2.8 percent sequential growth in December quarter net profit to Rs 2,611 crore, beating analysts' estimates.Revenue in rupee terms increased 5.6 percent quarter-on-quarter to Rs 15,699 crore in the quarter ended December 2018, the company said.