Buy HCL Technologies; target of Rs 1777: Religare Retail Research

Religare Retail Research report on HCL Technologies

HCL Tech Q4FY24 revenue in constant currency (CC) grew by 0.3% QoQ and 6% YoY while its dollar revenue grew by 0.4% QoQ and 6% YoY to USD 3,430mn. Its revenue in rupee was at Rs 28,499cr, up by 0.2% QoQ and 7.1% YoY. The growth was largely led by the service segment (contributes 90.5% of revenue) as it grew by 2.9% & 7.9% YoY to Rs 25,792cr while in CC terms it was up by 3% QoQ and 6.7% YoY. Amongst segments, in CC terms, telecommunication & Media led the growth with 39% YoY & 21.6% QoQ followed by manufacturing, retail & Financial services with 14.3% YoY, 9.4% YoY and 8.6% YoY. Amongst geographies, both America and Europe performed well with America gaining 9.2% YoY & 4.2% in CC while Europe gained 5.7% YoY & 2.3% QoQ in CC. For FY24, CC revenue was up by 5% YoY, revenue in dollar grew by 5.4% YoY to USD 13,270mn and rupee revenue up by 8.3% YoY to Rs 109,913cr. The growth was driven by both America & Europe regions while amongst verticals growth except for technology all the verticals specially financials services witnessed decent growth.

Outlook

Additionally, their capabilities, expertise and increasing client base would bode well for the growth ahead. On the financial front, we estimate its revenue/EBIT to grow by CAGR of 7.6%/10.7% over FY24 -26E and continue to maintain our Buy rating with the target price of Rs 1,777.

For all recommendations report, click here