Moneycontrol PRO
Upcoming Event:Join us for the exciting discussion with Danone on role of nutrition, protein in working professionals’ quality of life on July 31, 3pm.

Buy HCL Technologies; target of Rs 1180: Motilal Oswal

Motilal Oswal is bullish on HCL Technologies recommended buy rating on the stock with a target price of Rs 1180 in its research report dated dated July 20, 2021.

July 21, 2021 / 10:57 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Motilal Oswal's research report on HCL Technologies


HCLT delivered a growth of 0.7% QoQ (CC), below our estimate of 2.4%, led by weak growth in IT Services (+0.5%) and Products & Platforms (-1%), but partially compensated by better than expected ER&D (+4.5%). Excluding the impact of a one-time bonus in 4QFY21, EBIT margin was down 80bp QoQ and missed our estimate by 130bp due to COVID-related expenses of 90bp. The management reiterated its double-digit USD revenue growth guidance and EBIT margin band of 19-21% for FY22. -New deal TCV stood at USD1.7b (+37% YoY, eight large deals) in 1QFY22. Deals saw an increase in tenure, with a higher proportion of Cloud-centric Digital transformation programs. While growth in 1QFY22 was impacted by supply-related challenges (60-70bp) and project completion in Europe, we expect HCLT to deliver 11.5% USD revenue growth in FY22, led by a good demand environment and strong deal pipeline in Europe and US. The company should also benefit from a strong rebound in ER&D.


Outlook


We maintain our Buy rating as we expect traction in the Services business in 2HFY22E and FY23E, driven by higher IMS/Cloud focused deals. Our TP of INR1,180 per share implies 20x FY23E EPS.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jul 21, 2021 10:57 am

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark