BROKERAGES ON HCL TECH- HCL Tech’s third quarter results were around estimates. HCL Tech’s dollar revenue rose 2.6%. The company’s constant currency revenue growth was 3.8%. There was no change in the UPPER BAND of CC revenue growth guidance. Margins were better than expected and increased by 90 bps to 19.5%. The company has declared an interim dividend of Rs 12/share in Q3. A special dividend of Rs 6/share has also been announced in Q3. The total contract value in Q3 stood at $209 crore. LTM attrition rate in Q3 stood at 13.2%. Brokerage houses have mixed opinions on the company.
The market did not like the company’s results. At 10.05 am today, the stock was seen trading at Rs 1810.55, down about 9 percent or Rs 178.85.
After the company’s results, Nomura has given a buy opinion on HCL Tech. He has fixed its target at Rs 2000. He says Q3 results have been mixed. The company’s revenue was less than expected. The lower band of revenue growth guidance has been raised in FY25. With this the deal pipeline has reached a record high.
Jefferies has given a hold rating on HCL Tech. Its target has been fixed at Rs 2060. He says the results have been better than expected due to high margins. However, revenue growth in the third quarter was slightly less than expected. Management commentary on TCV has been good. They have reduced its revenue/EPS estimates by 1-2%. According to the brokerage, due to poor CC revenue growth and expensive valuations, they have adopted a sideline stance on the stock.
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Morgan Stanley has given equal weight rating on the stock. Its target has been fixed at Rs 1970 per share. According to him, the service business in Q3 was as per expectations. Lower-than-expected revenue guidance was offset by positive commentary from management. EBIT margin beat estimates by 19.2%. Service EBIT margin stood at 17.5% compared to expectations of 17.3%. Its EBIT margin guidance remained unchanged at 18-19%.
CLSA has given hold rating on HCL Tech. Its target has been fixed at Rs 1882. He says the company reported third-quarter results in line with expectations with a slight revision to its CC revenue growth guidance for FY25. Management sees improvement in demand momentum in smaller deals. Organic growth guidance in FY25 was a bit disappointing
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