Hold HCL Technologies; target of Rs 1190: ICICI Direct

ICICI Direct's research report on HCL Technologies

HCL Tech reported healthy revenue growth of 3.3% QoQ in constant currency on the back of healthy growth in organic revenues. Growth was broad based across geographies. Among services, infrastructure services (38.9% of revenues) registered healthy growth on the back of deal ramp ups. This growth momentum is expected to continue ahead. However, EBIT margin declined 65 bps in Q4FY19 mainly due to rupee appreciation (impact of 40 bps) and seasonal weakness in products & platform revenues.

Outlook

This coupled with recent run up in stock prompts us to maintain our HOLD recommendation with a revised target price of Rs 1190/share (~14x FY21E EPS).