Sharekhan's research report on HCL Technologies
Q2FY22 missed the mark due to a sharp fall in P&P business revenue; however, services revenue growth was strong, led by broad-based demand; Q2 saw healthy deal bookings, net employee additions and client addition As expected, the management reiterated its earlier guidance of a double-digit CC revenue growth and EBIT margins of 19-21%. The management guided for P&P revenue growth of 0-1% for FY2022 and expects a strong rebound in Q3. The company announced a policy that entails investor payouts of not less than 75% of net income cumulatively, over FY2022E to FY2026E, which is positive in our view.
Outlook
We maintain a Buy on HCL Technologies with a PT of Rs. 1,400, given strong deal wins, healthy client additions and reasonable valuations.
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