Anand Rathi has given Buy recommendation for HCL Technologies with a target price of Rs. 1550 in its research report issued on Jan 16, 2022
Anand Rathi’s research report on HCL Technologies
The company reported good results for the quarter under review. Revenue from operations improved by 15.7% year-on-year to Rs.223,310 million on consolidated basis. In constant currency (CC) terms the revenue grew by 15.0% YoY and 7.6% QoQ being the highest growth rate in the last 12 years. The company reported healthy revenue growth led by better performance across all regions – Americas, Europe & RoW. Mode-2 & Mode-3 business grew by 30.2% & 6.2% YoY respectively in constant currency terms. Segment wise – IT business services, Engineering services and Product platforms led growth during for the quarter by 15.3%, 19.7% & 12.7% YoY respectively. All verticals led growth – Financial Services, Manufacturing, Technology, Retail, Telecommunications, Life sciences and Public Services grew by 13.5%, 12.2%, 18.1%, 11.5%,12.4%, 21.3% and 14.8% YoY respectively.
With continuity of robust growth across Mode-2 and Mode-3 business (40.5% of revenue combined), we expect the growth momentum to continue supported by strong products, deal pipeline and ramp up of large deals. We maintain our BUY rating on the stock with a revised target price of Rs.1550 per share.