Accumulate HCL Technologies; target of Rs 1374: KR Choksey

KR Choksey recommended accumulate rating on HCL Technologies with a target price of Rs 1374 in its research report dated October 27, 2023.

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October 30, 2023 / 21:23 IST

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KR Choksey's research report on HCL Technologies

During the quarter, HCL Tech reported revenue of INR 2,66,720 mn, registering a growth of 8.05% on a YoY basis from INR 2,46,860 mn and on a QoQ basis it grew by 1.43% from INR 2,62,960 mn. The EBIT for Q2FY24 stood at INR 49,340, registering a growth of 11.45% on a YoY basis and on a sequential basis it grew by 10.63%. The operating margin stood at 18.50%, which showed an improvement by 154 bps on a QoQ basis and 57 bps on a YoY basis. Net profit for the quarter stood at INR 38,330 mn, registering a growth of 9.92% on a YoY basis and 8.55% on a sequential basis. The PAT margin stood at 14.37%, which expanded by 94 bps sequentially and 25 bps on a YoY basis. The EPS for the quarter stood at INR 14.13 as against INR 12.88 YoY and 13.03 QoQ.

Outlook

The company is currently trading at a PE multiple of 17.5. We have revised the target price to INR 1374 from the previous target price of INR 1,206; with a P/E multiple of 19x to the FY25 estimated EPS of INR 72.3, an upside of 8.3% over the CMP. Accordingly, we revised our rating to “ACCUMULATE” to the stock.

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