Emkay Global Financial's research report on HCL Tech
HCLT delivered better-than-expected operating performance in Q2. The demand environment continues to be healthy and fairly broad-based. Management remains confident about the near-to-medium term growth outlook on the back of strong deal intake and deal pipeline. HCLT has increased its revenue growth guidance to 13.5- 14.5% CC (earlier, 12-14%) for FY23, implying 2.6-3.8% CQGR in H2, on the back of continued traction in the services business, product business seasonality, healthy deal intake (USD2.38bn in Q2FY23) and strong momentum in Cloud, Digital & Engineering services. Management has revised EBITM guidance to 18-19% for FY23 (earlier, 18- 20%), and the strong recovery in Q2 grants it confidence on delivering within the guided range. We raise our earnings by 0.9% to 2.5% for FY23E-25E, factoring-in the Q2 performance.
Outlook
We maintain BUY, with a TP of Rs1,070/share at 17x Sep-24E EPS (earlier, Rs1,060), considering reasonable valuations and the >4% dividend yield.
More Info
At 13:32 hrs HCL Technologies was quoting at Rs 980.05, up Rs 28.40, or 2.98 percent.
It has touched an intraday high of Rs 987.75 and an intraday low of Rs 969.40.
It was trading with volumes of 195,547 shares, compared to its thirty day average of 234,582 shares, a decrease of -16.64 percent.
In the previous trading session, the share closed up 1.39 percent or Rs 13.05 at Rs 951.65.
The share touched its 52-week high Rs 1,359.00 and 52-week low Rs 875.65 on 13 January, 2022 and 29 August, 2022, respectively.
Currently, it is trading 27.88 percent below its 52-week high and 11.92 percent above its 52-week low.
Market capitalisation stands at Rs 265,952.75 crore.
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