Sharekhan has given Buy recommendation for HCL Technologies with a target price of Rs. 1400 in its research report issued on Aug 26, 2021
Sharekhan’s research report on HCL Technologies
After muted performance for the last two consecutive quarters, HCL Tech expects revenue growth to accelerate from Q2FY2022E given higher demand for Cloud IMS, record-high bookings and a strong deal pipeline. HCL Tech‘s ERS business is expected to outperform its IT business in FY2022E led by increasing demand for digital engineering, recovery in asset-heavy industries and deal wins. Company has stepped up investments in products and sales to drive the growth of its P&P business. Despite investments in capability building and wage revisions, we expect margins to sustain supported by revenue growth, higher offshoring and employee pyramid.
Outlook
We maintain a Buy on the stock with a PT of Rs. 1,400, given anticipation of strong acceleration in revenue growth from Q2FY2022 and reasonable valuation.