HCL Technologies - 4QFY2017 Result Update - Angel Broking

The company posted 4QFY2017 results better than expected. In US$ terms, the revenues came in at US$1,817mn (v/s US$1,810mn expected) v/s US$1,745mn in 3QFY2017, a qoq growth of 4.1%. On Constant Currency (CC) basis, company posted a 3.8% qoq growth. On the operating front, EBIT came in at 20.0% (v/s 20.1% expected) v/s 20.4% in 3QFY2017, a dip of 34bps qoq. Thus, PAT came in at 2,325cr (v/s Rs. 1,982cr expected) v/s Rs. 2,070cr in 3QFY2017, up 12.3% qoq. For FY'2018, revenues are expected to grow 10.5-12.5% in Constant Currency (CC) and EBIT Margin of 19.5-20.5%. We maintain our buy.

Quarterly highlights: In US$ terms, the revenues came in at US$1,817mn v/s US$1,745mn in 3QFY2017, a qoq growth of 4.1%. On Constant Currency (CC) basis, company posted a 3.8% qoq growth. On the growth front, USA posted a CC qoq growth of 5.3%, Europe posted a dip of 3.0% CC and ROW posted a CC qoq growth of 15.8%. In terms of verticals, Financial Services posted a CC qoq growth of 3.0%, Manufacturing posted a CC qoq growth of 6.3%, Life sciences & Healthcare posted a CC qoq growth of 0.1%, Public Services posted a CC qoq growth of 8.1%, while Retail & CPG posted a CC qoq growth of 2.1%. On the operating front, EBIT came in at 20% (v/s 20.1% expected) v/s 20.4% in 3QFY2017, a dip of 34bps qoq. Thus, PAT came in at 2,325cr (v/s Rs. 1,982cr expected) v/s Rs. 2,070cr in 3QFY2017, up 12.3% qoq.

Outlook and valuation: We expect HCL Tech to post a USD and INR revenue CAGR of 10.7% and 10.7% respectively over FY2017-19E. On the back of strong order book and given the attractive valuations, we recommend a Buy on the stock.

Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs.854.1 as compared to the previous close of Rs. 849.45. The total number of shares traded during the day was 89578 in over 2067 trades.

The stock hit an intraday high of Rs. 856 and intraday low of 843.05. The net turnover during the day was Rs. 76083082.

Source : Equity Bulls

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