Buy HCL Technologies; target of Rs 2400: Motilal Oswal

Motilal Oswal is bullish on HCL Technologies recommended buy rating on the stock with a target price of Rs 2400 in its research report dated January 13, 2025.

Broker Research

January 14, 2025 / 12:45 IST

Buy

Motilal Oswal's research report on HCL Technologies

HCL Technologies (HCLT) reported a revenue of USD3.5b, up 3.8% QoQ and 4.1% YoY in constant currency (CC), above our estimate of 3.7% QoQ CC growth (largely owing to one-month inorganic contribution from HPE CTG acquisition). EBIT margins came in at 19.5%, beating our estimate of 19.1%. New deal TCV stood at USD2.1b (down 5.5% QoQ) in 3QFY25. For FY25, the revenue growth guidance has been upgraded to 4.5%-5.0% YoY cc (including a ~50bp contribution from the HPE CTG acquisition, with organic growth at 4.0%-4.5%) from the earlier range of 3.5%-5.0%. For 4QFY25, the implied organic growth for ITB&S is now in the range of -1.6% to +0.6% QoQ in cc, which is a downgrade, in our view. For 9MFY25, revenue/EBIT/PAT grew 6.6%/6.5%/11.7% compared to 9MFY24.

Outlook

We expect revenue/EBIT/PAT to grow by 7.3%/6.6%/7.3% YoY in 4QFY25. We reiterate our BUY rating on HCLT with a TP of INR2,400, implying a 21% potential upside.

For all recommendations report, click here