IDEA2ACT - Buy: HCL Tech

Buy - HCLTECH

CMP (NSE) 11:22, 17 Jun

984.20 4.80.49%

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Sector

Information Technology

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Reco. Price

962

Period

12-Months

Target Price

1,140

upside

%

Stop Loss

0

Last updated on

10 Mar, 2021

HCL Tech is one of the biggest IT companies in India. It has been the most proactive to experiment with pricing strategies, having entered into revenue-sharing agreements with clients. Further, the company has developed expertise in infrastructure services. Its ERP offerings and consulting abilities have improved after the acquisition of Axon. This enhances HCL Tech’s full services ability and its standing in winning large, total-outsourcing deals. Services to manufacturing industry clients contribute significantly to revenue.  

Knocking on the door of a trillion-dollar market 

Incremental addressable opportunity of US$1trn over 2020-24:
HCLT sees a massive opportunity within the IT services, enterprise software, and ER&D markets over 2020-24. Personalisation, demand for niche skills, fluid delivery model, and higher ESG awareness are some emerging trends, while existing trends like automation & AI, hybrid cloud and customer experience has accelerated and should drive good business momentum for the next few years. Healthcare seems to be at the inflexion point, while cloud migration could be a US$150bn opportunity.

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