HCL Technologies Ltd - Margins continue to surprise - Emkay

Reco: ACCUMULATE
CMP: Rs 1413
Target Price: Rs 1600

- Inline revenues at US$ 1,361 mn (+3% QoQ), however margins improved by ~70 bps QoQ to 26.7% aided by 190 bps improvement in Infra segment driving strong performance

- Operating metrics performance remains decent with Europe (+4.8% QoQ) leading the growth. US continues to be 'relatively soft' similar to peers Infosys and TCS

- Deal wins remains strong at US$ 1bn+ TCV worth of deals. However attrition remains elevated which along with the increase in DSO remain the only weak points in an otherwise strong performance

- Raise FY15/16EPS by 3% to ~Rs 99/112 on a/c of higher margin resets. Retain ACCUMULATE, TP Rs 1,600. HCLT's performance stands out V/s peers Infosys and TCS

Source : Equity Bulls

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