Sharekhan's research report on HCL Technologies
HCL Tech reported revenue of $3,445 million, up 1.6% q-o-q/6.2 % y-o-y in CC terms, beating our estimates of 0.6% q-o-q growth in CC. EBIT margin expanded by 150 bps q-o-q to 18.6%, beating estimates of 17.9%, aided by strong operational execution. New deal wins TCVs stood at $ 2,218 million, up 13% q-o-q/down 44%, in line with expectations. Management has raised the upper end of its revenue growth guidance to 3.5-5% from 3-5% on CC terms while maintaining EBIT margin at 18-19% for FY25. The ask rate to achieve guidance is 0-2% CQGR over Q3-Q4.
Outlook
We maintain BUY with a revised PT of Rs. 2,120 (valued at 28x Sep26E EPS). At CMP the stock trades at 28.9/26/23.1x its FY25/26/27E EPS.
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