Views on HCL Technologies - Pre-Quarter Guidance for 1QFY2016: Angel Broking

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

HCL Technologies- Pre-Quarter Guidance for 1QFY2016:

"For 1QFY2016, the company has given a pre-quarter guidance indicating that revenues to be reported in US dollar to have an adverse impact of 80bps on account of sharp depreciation of multiple currencies against US dollar. The company expects tepid revenue growth in the first quarter on account of - adverse currency impact, a client specific issue and skewness in revenue growth due to transition timelines for complex engagements in infrastructure services.

In one of the multi-million custom application development project being executed for one of the customers, certain differences have risen with the customer. The company reserved upto US$ 20mn as a matter of prudence.

These factors will have a significant impact on the overall performance of the company in 1QFY2016. Though currency is a quarterly impact, the client specific issues can have an impact for the FY2016 numbers. Since the exact impact is not ascertained as of now we are not changing our numbers and will wait for more clarity on the issue. However, we believe in the worst case scenario, the impact would be around 5-6% on EPS in FY2016. We currently maintain our BUY with a price target of INR 1132."

Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs.857.9 as compared to the previous close of Rs. 982.15. The total number of shares traded during the day was 1234685 in over 44561 trades.

The stock hit an intraday high of Rs. 915 and intraday low of 837.2. The net turnover during the day was Rs. 1080203792.

Source : Equity Bulls

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