Religare's report on HCL TechnologiesHCLT posted mixed Q1FY16 numbers, with tepid CC revenue growth of 1.2% QoQ but a 50bps EBIT margin expansion (excluding one-time client provisions of US$ 18mn) to 20.6% vs. RCMLe of 19.7%. While topline growth was hit by weak performance in IMS and Americas, management expects some recovery in H2. Management commentary on better than industry growth for FY16 should support the stock, which is currently trading at attractive valuations of 13.7x FY17E. Maintain BUY.View: Q1FY16 was a mixed quarter for HCLT, with a revenue miss but better margins. Nevertheless, its commentary on industry-leading growth implies some recovery in H2, with management reiterating its full-year EBIT margin guidance of 21-22%. We largely maintain our EPS estimates, and believe cheap valuations (13.7x FY17E) provide downside support. Maintain BUY with a Sep’16 TP of Rs 975 set at 15x one-year forward P/E (as against Rs 1000 set at 15.5x earlier)., says Religare research report.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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