Buy HCL Technologies; target of Rs 1850: Sharekhan

Sharekhan's research report on HCL Technologies

Reported revenue stood at $3,545 million, up 1.3 % q-o-q/5.4% y-oy, in line with our estimate of $3,543 million. EBIT margin fell by ~160 bps q-o-q to 16.3%, missing our estimate of 17.3%. New deal win TCVs stood at $1,812 million, down 8% y-o-y was balanced across service lines, geographies and verticals. Company raised lower end of revenue growth guidance for FY26 to 3-5% from 2-5% in CC terms but lowered EBIT margin guidance to 17-18% from 18-19%.

Outlook

We maintain a Buy rating with a revised PT of Rs. 1,850 (valued at 25x FY27E EPS). At CMP, the stock trades at 25.1/21.8x FY26/27E EPS.