HCL Technologies reported strong Q1FY25 results beating our estimates across the board. Revenue grew to INR 2,80,570 Mn, up 6.7% YoY which beat our estimates by 1.0%, driven by the Engineering and R&D segment (+9.5% YoY) and the IT and Business service segment (+6.4% YoY). EBIT grew to INR 47,950 Mn (+8.0% YoY), beating our expectation by 1.5%; EBIT margin expanded 21 bps YoY and 54 bps QoQ. PAT exceeded our expectations and jumped to 42,570 Mn, up 20.5% YoY driven by higher other income and better operational performance; PAT margins expanded by 173 bps YoY and 119 bps QoQ.
OutlookWe increase our FY26E EPS and the assigned multiple to raise our target price to INR 1,668 (previously: INR 1,546) on better-than-expected Q1FY25 results. We retain our “ACCUMULATE” rating on HCL Tech.
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