CLSA has maintained buy rating on HCL Technologies with a target at Rs 1,380 per share.
Shares of HCL Technologies rose more than 4 percent in the early trade on August 8 as brokerages maintained the buy rating on the stock despite company's Q1 net profit declined on August 7.
The company reported a 13 percent sequential decline in June quarter (Q1) profit at Rs 2,220 crore, dented by operating income, but maintained full-year revenue growth guidance.
The profit in the previous quarter was Rs 2,568 crore. The year-on-year profit fall was 7.6 percent.
Revenue was ahead of estimates at Rs 16,425 crore in the quarter ended June 2019, growing 2.7 percent sequentially and 18.7 percent year-on-year, the company said in its BSE filing.
Revenue in dollar terms increased 3.8 percent quarter-on-quarter (15 percent YoY) to $2,364 million and the same in constant currency grew 4.2 percent QoQ (up 17 percent YoY).
BNP Paribas has maintained a buy rating on the stock but cut target to Rs 1,200 from Rs 1,240 per share.
The company is well on track for FY20 targets, while cut FY20-22 EPS estimates by 4 percent for Q1 results & higher tax rates, it said.
The valuation at 13x FY20e P/E remains inexpensive, while IBM deal will be margin accretive from the outset, it added.
Nomura has maintained buy call on the stock with a target at Rs 1,270 per share.
According to Nomura, the improvement in organic growth led by better than ramp-up in large deals is positive, while miss on Q1 margin and guidance of tax rate of 24 percent in FY20 are negative.
It expects a cut in consensus estimates and its valuations are attractive at 12x FY21e EPS (discount of 35-45 percent to Infosys/TCS).
CLSA has maintained a buy rating on HCL Technologies with a target at Rs 1,380 per share.
The stellar revenue beat with organic growth accelerating above larger peers. The margin decline was largely a one-off from IBM deal transition costs, while tax increase drives a 3 percent cut in our FY21-22 EPS estimates, said CLSA.
Jefferies has maintained hold rating on the stock and raised target to Rs 1,120 from Rs 1,090 per share.
The company has reported stronger than expected revenue growth of 4.2 percent QoQ in CC, helped by large deal ramp-up & lower client-specific headwinds.
Unchanged growth guidance of 14-16 percent for FY20 seems too conservative and expect FY20 margin to be at the lower end of the guided range of 18.5-19.5 percent, said Jefferies.At 0922 hours, HCL Technologies was quoting at Rs 1,062.30, up Rs 40, or 3.91 percent on the BSE.The Great Diwali Discount!
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