HCLTech Q3 Results Review -Commentary Retains Near Term Caution; 'Reduce' Says Dolat Capital; Here's Why

HCLTech reported total contract value wins of $2.1 billion, down 5.5% QoQ (trailing twelve months’$8.6 billion, down 10.2% YoY)..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.HCLTech Ltd. reported revenue of $3,553 milion, up 3.8% in constant currency (our estimate: 3.7%) led by a seasonally strong Software biz. The IT/ER&D/Software biz grew by 1.5%/5.4%/18.7% QoQ. Operating profit margin expanded by 90 bps to 19.5% mainly due strong OPM from Software biz and gains from Project Ascend (100 bps), despite impact of furloughs (40 bps) and wage hikes (80 bps). The company raised its CC growth guidance to 4.5%-5% (previous: 3.5%- 5%) factoring more 50 bps from HPE assets’ inorganic contributions. Overall commentary, however, remains cautiously optimistic. We slightly inch up our FY25/26/FY27E EPS estimates by 2.5%/2.6%/2.3 noting OPM improvement. However, as valuations are nearing peak, we revise our rating to ‘Reduce’ with a target price of Rs 2,050, at 27 times of FY27E earnings..Click on the attachment to read the full report:.HCLTech Q3 Review: Brokerages Split On Outlook — Nomura Positive, Citi And Bernstein Cautious.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HCLTech Q3 Results Review -Commentary Retains Near Term Caution; 'Reduce' Says Dolat Capital; Here's Why

Noting largely mixed commentary of cautious optimism, the brokerage has largely retained its revenue estimates with USD estimates tweaked slightly to note cross-currency headwind.

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