Views on HCL Technologies Ltd 3QFY2018: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research- IT, Angel Broking):

"HCL Tech for 3QFY2018 posted better than expected results, the sales came in at US$1,988mn v/s US$1,977mn expected and V/s US$1,929mn in 2QFY2018, registering a QoQ growth of 3.1%. On constant Currency (CC) terms, the company posted a QoQ growth of 3.3%. In rupee terms, revenues came in at INR 12,808cr V/s INR 12,795cr expected V/s INR 12,434cr in 2QFY2018, up 3.1% QoQ. In terms, of the geography the USA posted a QoQ 4.9% CC growth, Europe posted a 1.9% QoQ CC growth & ROW posted a 3.9% CC dip during the quarter. In terms, of the verticals, the Manufacturing and Retail & CPG was the key growth driver for the company registering a CC QoQ growth of 6.6%. Life Sciences & Healthcare posted a QoQ CC growth of 2.4%, while Financial Services posted a moderate 1.4% CC QoQ growth during the quarter. On EBIT front, the company posted an EBIT of 19.6% V/s 19.7% expected V/s 19.7% in 2QFY2018. The margins held up only up on back of 85.8% capacity utilization V/s 86.0% in 2QFY2018. Consequently, the PAT came in at INR 2,194cr V/s INR 2,168cr expected V/s INR 2,188cr in 2QFY2018, growth of 0.3% QoQ.

In terms of guidance, the company expects FY'2018 revenues to grow between 10.5-12.5% in Constant Currency. The above constant currency guidance translates to 12.1% to 14.1% in US$ terms based on December 31, 2017 rates. Operating Margin (EBIT) for FY'2018 is expected from 19.5% to 20.5%. We maintain our ACCUMULATE rating on the stock, with a price target of INR 1,014."

Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs.1005.25 as compared to the previous close of Rs. 1018.85. The total number of shares traded during the day was 52384 in over 1236 trades.

The stock hit an intraday high of Rs. 1016.6 and intraday low of 991.5. The net turnover during the day was Rs. 52569027.

Source : Equity Bulls

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