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Buy HCL Technologies; target of Rs 1000: ICICIdirect

ICICIdirect.com is bullish on HCL Technologies and has recommended buy rating on the stock with a target price of Rs 1000, in its research report dated April 22, 2015.

July 31, 2015 / 20:19 IST
 
 
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ICICIdirect.com's report on HCL Technologies

HCL Tech reported weak Q3FY15 earnings as growth and margins came in below our estimates

US$ revenues were flat QoQ ($1,491 million), below our $1,498 million estimate (constant currency revenues grew 2.7% QoQ). EBIT margins declined 246 bps QoQ to 21.3% (23% estimate) led by adverse currency, partial wage hikes and business reinvestments

Reported PAT of Rs 1,683 crore was also below our Rs 1,812 crore estimate led by a decline in revenue and margins

"We expect HCLT to report revenue, PAT CAGR of 13%, 12% in FY14-17E with average 22.3% margins in FY15-17E led by order book conversion. We roll forward our valuation to FY17E and now value the stock at 16x FY17E EPS of Rs 63 (16.7x FY16E EPS) to arrive at our target price of Rs 1,000. The lower multiple is to account for longer time horizon", says ICICIdirect.com research report.

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first published: Apr 28, 2015 04:51 pm

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