Buy HCL Technologies; target of Rs 970: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on HCL Technologies

We maintain BUY on HCL Tech (HCLT), based on broad-based 2Q performance and multiple growth vectors. HCLT’s prowess in cloud infra business is a strong competitive advantage with enterprises accelerating cloud adoption and higher annuity streams supported by P&P upside. The positive outlook is also predicated on (1) strong deal wins with TCV up 35% QoQ, supported by 15 transformational wins (eight in life-science & healthcare vertical) and pipeline at an all-time high, (2) strengthening partner ecosystem with hyperscalers increasing the addressability and client access, (3) continued traction in P&P business with cross-sell opportunities (>12,000 unique customers signings), supported by upgrades/launches (Unica/DRYiCE in 2Q).

Outlook

The absence of large acquisitions and subsequent accretion to FCF/payout are the upside risks to valuations. HCLT is among our top picks in the sector, and our target price of Rs 970 is based on 18x Sep-22E EPS.

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