Sharekhan has given Buy recommendation for HCL Technologies with a target price of Rs. 1400 in its research report issued on Nov 23, 2021
Sharekhan’s research report on HCL Technologies
We expect a strong bounceback in growth in Q3FY2022 given strong deal wins, robust net headcount addition, anticipated good recovery in products & platforms business, client additions and broad-based demand. HCL Tech’s strong IMS capabilities, robust partnerships with hyperscalers and strengths in digital foundation and modern applications position the company to capitalise opportunities in cloud space. HCL Tech’s new payout ratio of at least 75% of net income over FY2022-2026 is positive. It provides comfort on efficient capital allocation ahead and will limit any large inorganic investments.
Outlook
We maintain a Buy on HCL Technologies with a PT of Rs. 1,400, given strong growth momentum in services business, robust deal win TCVs, aggressive net headcount addition and reasonable valuation.