Q4FY21 Result Update - HCL Technologies - ICICI Direct

HCL Tech's results were below our expectations. However, the company won 19 transformational deals across industry verticals. New deal TCV in this quarter increased 49% YoY at US$3.1 billion and 18% YoY to US$7.3 billion in FY21. Further, in terms of guidance, HCL expects to grow in double digits in constant currency for FY22E and expects EBIT margin to be between 19.0% and 21.0% for FY22E. The company has declared a dividend of Rs. 6/share. Also, the board has declared a special dividend of Rs. 10/share.

Valuation & Outlook

The company witnessed healthy new deal wins (up 18% YoY to US$7.3 billion in FY21). This, coupled with traction in cloud & cloud related services, expansion in other geographies, investment in sales, inorganic growth and opportunities in captive carve outs makes us positive on HCL's revenue trajectory in the long term. Hence, we maintain BUY on the stock with a target price of Rs. 1,110 (18x PE on FY23E EPS) (earlier target price Rs. 1150).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_HCLTech_Q4FY21.pdf

Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs.955.8 as compared to the previous close of Rs. 961.15. The total number of shares traded during the day was 194859 in over 6726 trades.

The stock hit an intraday high of Rs. 974.55 and intraday low of 950.15. The net turnover during the day was Rs. 187636677.

Source : Equity Bulls

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