Hold HCL Technologies - Emkay

Reco: HOLD
CMP: Rs 425
Target Price: Rs 430

Decent show, retain HOLD

HCLT reported in line op performance with revenues at US$ 1,022 mn (+2% QoQ, +3.7% in c.c terms) and margins improving by ~140 bps QoQ to 18.1% aided by weak currency.

Core IT Svcs see a 3.8% QoQ (+5% vol) growth while IMS saw an unexpected 3% seq decline. Op metrics performance decent with US/Europe growing by 7.4%/2.7% QoQ.

BFSI, Manufacturing grow by 2.8/3.7% QoQ. Co announces 18 deal wins with a TCV of US$ 1 bn+. Cash generation improves with CFO's at US$ 132 mn (70% of op profits)

Tweak FY12/13E EPS marginally lower by 0.8%/0.5% to Rs 34/38.5 as we cut our US$ revenue estimates modestly. Retain HOLD with an unchanged TP of Rs 430.

Source : Equity Bulls

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