Buy HCL Technologies; target of Rs 1058: Edelweiss

Edelweiss' research report on HCL Technologies

HCL Technologies’ (HCLT) Q4FY17 revenue at USD 1,817mn jumped 4.1% QoQ (3.8% in CC terms) versus Street’s 3.1% growth estimate. EBITDA margin at 22.0% came in line with Street’s estimate. Management has guided for 10.5-12.5% CC revenue growth and 19.5-20.5% operating margin in FY18.

Outlook

We maintain our thesis that with a significant portion of the portfolio geared towards IMS, ER&D and digital, HCLT is poised to report modest revenue growth. Maintain ‘BUY’ with INR 1,058 target price.