HCL Technologies (HCL) reported healthy margins in Q3FY21 and were above our estimates. The company has also revised its margins guidance upwards from 20-21% in FY21E to 21-21.5%. Revenues were in line with our estimate at 3.5% QoQ in CC terms, while margins were above our estimates. HCL has signed 13 transformational deals across industry verticals, including Life Sciences and Healthcare, Technology and Financial Services. The company has declared a dividend of Rs. 4/share.
Valuation & Outlook
We believe HCL Tech is in a sweet spot to capture demand traction in cloud and cloud related services considering its strength in IMS business & partnership with hyperscalers. In addition, better capital allocation and healthy margin trajectory makes us positive on the stock from a long term perspective. Hence we maintain BUY on the stock with a target price of Rs. 1150 (18x PE on FY23E EPS) (previous target was Rs. 1105).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HCLTech_Q3FY21.pdf
Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs.980.95 as compared to the previous close of Rs. 989.4. The total number of shares traded during the day was 394140 in over 14965 trades.
The stock hit an intraday high of Rs. 1004.75 and intraday low of 977. The net turnover during the day was Rs. 390132110.