HCL Technologies - Q1 FY22 Result Report - YES Securities

(Rating: BUY, TP: Rs1,160, Upside: 16%)

- Reported revenue of $2,720 mn, up 0.9% QoQ, (up 2.2% QoQ in INR terms) less than expected due to around $7mn impact in Revenue from 2nd covid wave disruption in IT Services delivery and weak growth in Product business. Sequential growth was led by strong performance in E R&D services. In terms of verticals, Financial Services and Healthcare performed relatively better.

- EBIT Margin declined by 70 bps QoQ to 19.6%; decline was slightly more than expected due to around 90 bps impact of covid19 2nd wave. Also, investment in digital engineering capabilities and geographical expansion had adverse impact on margin

- Strong deal booking as it signed new deal wins of $1.66 bn, up 37% YoY, that included 8 large service deal wins.

- Record deal booking provides strong revenue growth visibility. It trades at attractive valuation of 17x on FY23 earnings. We maintain BUY on the stock with revised target price of Rs 1,160

Shares of HCL TECHNOLOGIES LTD. was last trading in BSE at Rs. 977.3 as compared to the previous close of Rs. 1000.2. The total number of shares traded during the day was 570227 in over 22111 trades.

The stock hit an intraday high of Rs. 1008 and intraday low of 969.5. The net turnover during the day was Rs. 558043703.

Source : Equity Bulls

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