HCLT delivered strong 3.5% QoQ CC revenue growth, beating our expectations, led by robust 8.3% growth in the products and platform business. EBITM expanded by 130bps sequentially to 22.9%, driven by revenue acceleration and offshore shift. HCLT signed 13 new transformational deals (>USD25mn TCV) in Q3 across verticals, including Life Sciences & Healthcare, Technology and Financial Services. Deal bookings grew 13% YoY. The deal pipeline remains robust at closer to an all-time high. The company expects revenue growth of 2-3% QoQ CC in Q4 (organic growth 1-2%). Q4 guidance is tad lower than expectations (compared to 0.5%-2.5% from Infosys and 1.5%- 3.5% from Wipro). It expects EBITM to be in the range of 21%-21.5% for FY21.
OutlookWe raise our FY21/22/23E EPS by 8.4%/4.5%/4.1% on solid Q3 performance, better margins and uptick in demand environment. We maintain Buy with a revised TP of Rs1,130 (earlier Rs 1,090) based on 20x FY23E EPS.
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