Prabhudas Lilladher expects correction in HCL Tech

Prabhudas Lilladher has come out with its report on HCL Tech`s result update in its January 17, 2013 research report.
 
“HCL Tech reported Q2FY13 results touch ahead PLe/Consensus expectation on revenue, with revenue growth of 3.3% QoQ (3.1% @cc) in USD terms for Q2FY13, but delivered strong margin performance. HCL Tech signed 12 multi-year, multimillion dollar deal of TCV $1bn in Q2FY13. Mr Anant Gupta has been elevated to the role of CEO and President, whereas Mr. Vineet Nayar continues to be Vice Chairman of the company. The stock has outperformed NIFTY and CNXIT by ~11% and ~5% respectively over the last 3 months. We expect correction in stock price.”
 
“HCLT revenue grew by 3.0% QoQ to Rs62.74bn for Q1FY13 (PLe Rs62,470mn, Cons: Rs62,058mn) in INR term, whereas revenue in USD terms grew by 3.3% QoQ to $1,154mn (PLe: $1,143.1mn). EBITDA margin expanded by 40bps to 22.2% (PLe: 20.6%, Cons: 21.3%). The company reported EPS of Rs13.42 (PLe: Rs12.35, Cons.: Rs11.82), a growth of 6.8% QoQ. BPO margin improved by 239bp to 11.6%, whereas revenue grew by 1.8% QoQ for BPO. Revenue for US and Europe grew by 3.5% and 5.9% QoQ respectively. In terms of services, IMS and Custom Application grew by 10.6% and 2.3% QoQ respectively.In terms of verticals, BFS and MPE grew by 10.9% and 3.6% QoQ respectively. The pricing witness an up-tick of 0.5% QoQ (onsite: -0.1%, offshore: 1.9%) whereas volume growth was 0.4% (onsite: 0.4%, offshore: 0.4%) for IT Services. Overall volume growth of 3% QoQ. The company hired 4711 lateral employees (Q4FY12: 5064 Q1FY13: 5465) for the quarters and added 39 new clients (Q4FY12: 50, Q1FY13:38) in Q2FY13. Attrition stable at 13.6% (from13.6% previous quarter),” says Prabhudas Lilladher research report.

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