Mayuresh Joshi of Angel Broking told CNBC-TV18, "One should wait for decline to buy into HCL Technologies because the IT sector will go through some amount of sluggishness in Q3-Q4. There were some shutdowns happening which will impact margins for most companies within the IT space in Q3 and the discretionary spending of most US corporate budgets will be from Q4. So, the next couple of quarters might be sluggish for IT companies in terms of EBITDA margins but the rupee depreciation, where it is and where the rupee stands right now is going to benefit within the IT space.”
He further added, “HCL Technologies has shown robust performance over the past few quarters, amazing volume growth, the margin expansion has been quite substantial as well and the total contract value (TCB) win of around a billion dollar is for every quarter for the past few quarters have been substantial for the company going forward.”
“Our estimates are that the infrastructure management services (IMS) business, which is the sole driver for HCL Tech’s growth in terms of revenues can grow 15 percent in dollar terms, around 20 percent in rupee terms, the EBIT can grow around 22 percent and earnings per share (EPS) can grow around 24 percent on CAGR basis in the next two years. So, we remain structurally positive on HCL Tech but one should use the opportunity to buy the stock on dips and take a long-term view of 12-15 months to make substantial gain in the stock.”
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