What should investors do with HCL Technologies after Q1 results: buy, sell or hold?

The stock was trading at Rs 972.75, down Rs 27.45, or 2.74 percent. It has touched an intraday high of Rs 1,008 and an intraday low of Rs 969.50.

Here is what brokerages have to say about the stock and the company after Q1 earnings:

CLSA: Rating: Buy | Target: Rs 1,180

The brokerage firm is of the view that the company's revenue was a miss due to transient factors. It expects momentum to come back strongly in Q2. "Deal wins in Q1 were healthy with an all-time high pipeline. We trim FY22/FY23 EPS estimates by 2 percent/1 percent. Risk-reward attractive at current levels," it added.

Morgan Stanley | Rating: Equal-weight | Target: Rs 1,065

Q1 results stood out against peers in terms of slower QoQ growth. It gave lack of positive surprises on FY22 guidance and a weak margin YoY.

Expect large valuation discount against larger peers to persist, Morgan Stanley said.

Catch all the market action on our live blog

UBS | Rating: Sell | Target: Rs 855

The brokerage firm believes that the Q1 miss is unlikely to please as FY22 guidance remains unchanged. It expects cuts to consensus forecasts, which could spur a negative reaction for the stock

Motilal Oswal | Rating: Buy | Target: Rs 1,180

HCL Tech delivered a growth of 0.7 percent QoQ (CC), below our estimate of 2.4 percent, led by weak growth in IT Services (+0.5 percent) and Products & Platforms (-1 percent), but partially compensated by better than expected ER&D (+4.5 percent). Excluding the impact of a one-time bonus in 4QFY21, EBIT margin was down 80bp QoQ and missed our estimate by 130bp due to COVID-related expenses of 90bp. While its FY22 growth guidance for the Products and Platforms business remains in low single-digits, we remain confident of HCLT growing in low teens on the back of an improvement in IT Services and ER&D verticals. We continue to see higher potential for the Products and Platforms vertical in the medium term and expect it to return to double-digit growth in FY23E (we estimate 13.6 percent CC USD growth).

We downgrade our FY22E/FY23E EPS estimate by 4 percent. We factor in a revenue miss and lower growth in the Products and Platforms business. We have reduced our margin estimate to factor in higher sales and marketing investments in FY22E. We maintain our Buy rating as we expect traction in the Services business in 2HFY22E and FY23E, driven by higher IMS/Cloud focused deals. Our target of Rs 1,180 per share implies 20x FY23E EPS.