November 02, 2016 / 12:08 IST
HCL Tech (HCLT) reported steady Q2FY17 results with in‐line revenues and margin beat. Company has retained FY17 CC revenue guidance at 12‐14% YoY and EBIT margin guidance at 19.5‐20.5%. Guidance implies QoQ revenue growth range of 1.2‐3.6% over Q3‐Q4FY17, which is robust in our view. Company has maintained that the deal pipeline remains strong and they have not witnessed any delay in decision‐making.
HCLT’s robust outlook is better than most of its peer group. Most of the companies have either witnessed slowdown or indicated soft H2FY17. In this context, HCLT’s performance is heartening. We upgrade HCLT to “BUY” from Accumulate, raise FY17/18/19 EPS by 1%/2%/2%, respectively and raise TP to Rs1,005 (was Rs990) based on 15x Dec‐18 EPS.
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