Hold HCL Technologies; target of Rs 1050: ICICI Direct

ICICI Direct's research report on HCL Technologies

US$ revenues grew 0.8% QoQ to $2,055 million, lower than our 2.2% growth and $2,083 million estimate. Revenues in constant currency grew 2.7% QoQ Revenues in rupees grew 5.3% QoQ to | 13,878 crore, largely in line with our 5.9% QoQ growth and | 13,957 crore estimate At 19.7%, EBIT margins increased 10 bps QoQ, below our 20.1% and 50 bps expansion estimate

Outlook

Although healthy bookings and strengthening its position in Mode 2 &3 (Emerging Technologies & product & solutions platform) could bode well for growth, a revival in its IMS (36% of revenues) is still missing and needs to be watched. Hence, we maintain our HOLD recommendation with target price of | 1050.