Global brokerage firms maintained their rating on HCL Technologies post-March quarter results but some raised their target price on attractive valuations
Global brokerage firms maintained their rating on HCL Technologies post-March quarter results but some raised their target price on attractive valuations.
They believe the acquisition of IBM IP Products deal is likely to be earnings accretive.
HCL Technologies registered a net income of Rs 2,568 crore, up 15.3 percent year-on-year for the quarter ended March 31, 2019. The profit fell 1.7 percent sequentially though.
The net revenue for the quarter grew 21.3 percent YoY to Rs 15,990 crore over the comparable quarter the previous year.
For FY20, the company has increased its revenue guidance from 9.5 -11.5 percent to 14-16 percent in constant currency. The company expects an operating margin (EBIT) to range from 18.5 percent to 19.5 percent.
Here’s what global brokerage firms recommended on HCL Technologies post Q4 results:
Credit Suisse: Outperform| Target raised to Rs 1,330 from Rs 1,310 earlier
Credit Suisse maintained its outperform rating but raised its target price to Rs 1,330 from Rs 1,310 earlier.
The organic growth recovery continues to marred by a weaker margin outlook. The growth trends continue to recover with a robust deal pipeline.
The new deal ramp-ups are likely to weigh on margin in H1FY20. Cheap valuations would warrant some re-rating, said the brokerage note.
Deutsche Bank: Buy| Target raised to Rs 1,190 from Rs 1,070 earlier
Deutsche Bank maintained its buy rating on HCL Technologies post-March quarter results and raised its target price to Rs 1190 from Rs 1070 earlier.
The revenue guidance of 14-16% includes organic growth guidance of 7-9%. The deal pipeline is 10 percent higher compared to FY18-end.
Almost 40 percent of the pipeline consisted of integrated deals with digital services as a key pillar said the note.
Macquarie: Outperform| Target raised to Rs 1,380 from Rs 1,300 earlier
Macquarie maintained its outperform rating on HCL Technologies post-March quarter results but raised its target price to Rs 1,380 from Rs 1,300.
Organic growth guidance of 7-9 percent in FY20 from 6.5 percent in FY19 a highlight. The organic growth rate to pick up in FY20 on large deal wins.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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