Sharekhan has given Buy recommendation for HCL Technologies with a target price of Rs. 1200 in its research report issued on Jul 19, 2021

Sharekhan’s research report on HCL Technologies

Revenue and EBIT margin missed our estimates owing to revenue loss amid second wave of COVID-19; but Q4 witnessed healthy deal bookings (37% y-o-y), employee additions (7,522+ on q-o-q) and a strong deal pipeline. As expected, the management reiterated its earlier guidance of a double-digit CC revenue growth and EBIT margin of 19-21%. Management remains confident on delivering strong q-o-q growth for remaining quarters of FY2022. Strong deal pipeline, aggressive net employee addition, healthy deal bookings and strong demand create a solid platform for HCL Tech to deliver revenue growth in FY2022E. We expect HCL Tech to clock a 12.6% CAGR in revenue over FY2021-24E.

Outlook

We maintain a Buy on HCL Technologies with a PT of Rs. 1,200, given consistent wins in integrated deals, strong deal pipeline and reasonable valuations.

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