Emkay's research report on HCL Technologies
Revenues at US$ 1,434 mn (+1.9% QoQ, +3.2% QoQ in c.c terms) misses expectations of ~3.3% QOQ US$ growth. Tepid growth across segments disappoints as both Core Software and IMS grow ~2% QoQ
EBIT margin decline restricted to 30 bps QoQ on account of lower depreciation resulting from change in depreciation policy
Profits at Rs18.7 bn (+2.1% QoQ),tad higher than expectations aided by higher other income despite the miss on operational performance
While we moderate our revenue/margin assumptions, change in depreciation policy and lower currency resets drives a2.5% increase in our FY15E EPS. We cut FY16E EPS by ~2%. Retain ACCUMULATE, TP Rs 1,700. Will recommend adding positions at ~Rs 1,400-1,450 levels. Infosys and TCS remain our preferred bets however in the sector", says Emkay Global Financial Services research.
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