HCL Tech: Revenues seen at Rs217,099 million, PAT at Rs34,357 million

13 Jan 2022 , 10:38 AM

Result date: 14th January, 2022
Recommendation: BUY
Target price: 1,450
(Source: Company, Bloomberg, IIFL Research)

HCL Technologies is expected to report revenue growth of 4.5% QoQ on a constant currency basis. Healthy net new deals won in H1, the strong outlook in IT and ER&D services and seasonality in Products & Platforms will drive revenue growth. Deal wins for the quarter should also remain strong.

The company’s margins are expected to expand by 40bps QoQ due to rupee depreciation and a higher share of revenues from the Products & Platforms segment.

Important management insights to watch out for:

1) Organic growth outlook within IT services in FY22, as company had indicated that its guidance of double-digit growth in FY22 was a conservative one
2) Update on strategic changes for Products & Platforms post management change
3) Attrition trends and thoughts on supply

	December 2021 estimates	QoQ change	YoY change
Revenue (US$ mn)	2,893	3.6%	10.5%
Revenue (Rs. mn)	217,099	5.1%	12.5%
EBIT (Rs. mn)	41,982	7.2%	-4.9%
EBIT margin	19.3%	40 bps	(350) bps
Profit After Tax (Rs. mn)	34,357	5.2%	(13.7)%
EPS (Rs.)	12.7	5.2%	(13.7)%

Source: Bloomberg, IIFL Research