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Research
Views on HCL Technologies Ltd 1QFY2018 Results: Angel Broking
Posted On : 2017-08-03 20:43:41( TIMEZONE : IST )
Views of Ms. Sarabjit Kour Nangra (VP Research - IT, Angel Broking):
"HCL Tech for 1QFY2018, posted results below expectations on sales front, while EBIT and net profit came in higher than expected. The sales, came in at US$1,884mnV/s US$1,891mn expected V/s US$1,817mn in 4QFY2017, a QoQ growth of 3.7%. In Rupee terms, the sales came in at INR 12,149 V/s INR 12,208cr expected V/s INR 12,053cr in 4QFY2017, a QoQ growth of 0.8%. Revenue in Constant Currency was up 2.6% QoQ.
The growth in terms of geography was driven by the USA and ROW, which posted a QoQ CC growth of 3.8% and 3.1%. Europe on the other hand posted a CC QoQ dip of 0.4%. In terms of the services, it was Engineering and R&D Services which posted a CC QoQ of 7.9%. In terms of verticals, the financial services posted a QoQ CC growth of 5.3%, Life sciences & Healthcare posted a QoQ CC growth of 4.8%, while Retail & CPG posted a QoQ CC growth of 4.9%.
On the operating profit front the EBIT came in at 20.1% V/s 19.5% expected V/s 20.0% in 4QFY2017, a QoQ expansion of 8bps. Thus, PAT came in at INR 2,171cr V/s INR 2,101cr expected V/s INR 2,325cr in 4QFY2017, a QoQ dip of 6.6%.
During the quarter, the strong client addition continued (on YoY basis): $5+ Mn clients up by 12, $10+ Mn clients up by 8, $20+ Mn clients up by 6, $40+ Mn clients up by 3, $50+ Mn clients up by 5 and $100+ Mn clients up by 1. Blended utilization during the quarter was 86.0% and attrition was at 16.2% V/s 16.9% in 4QFY2017.
In terms of guidance, the company has reiterated that FY'2018 Revenues are expected to grow between 10.5% to 12.5% in Constant Currency, while Operating Margin (EBIT): FY'18 expected Operating Margin (EBIT) range is from 19.5% to 20.5%. We maintain our BUY rating on the stock."
Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs.874.55 as compared to the previous close of Rs. 883.7. The total number of shares traded during the day was 40394 in over 2513 trades.
The stock hit an intraday high of Rs. 885.8 and intraday low of 871.3. The net turnover during the day was Rs. 35396076.
