Hold HCL Technologies; target of Rs 902: Axis Direct

Axis Direct's research report on HCL Technologies

Multi-mode (Mode 1-2-3) strategy is enabling deeper penetration, market share gains and driving differentiated IP/platform offerings. Management expects Mode 2-3 strategy to contribute 35% of portfolio by FY21 (FY17: 19%).

Outlook

We expect USD revenue CAGR of 11% over FY17-19E. In INR terms, our CAGR stands at 12% for revenue, 14% for EBIT and 12% for PAT with an EPS of Rs 65/ Rs 75 for FY18E/FY19E. We rollover our target price to FY19E and value the company at Rs 902 (12x FY19E). Maintain HOLD given 8% upside from CMP of Rs 839. The stock trades at 13x/11x FY18E/19E EPS.