Views on HCL Technologies Ltd 3QFY2018: Angel Broking

Best finance blog : NewsPatrolling.com - “HCL Tech for 3QFY2018 posted better than expected results, the sales came in at US$1,988mn v/s US$1,977mn expected and V/s US$1,929mn in 2QFY2018, registering a QoQ growth of 3.1%. On constant Currency (CC) terms, the company posted a QoQ growth of 3.3%. In rupee terms, revenues came in at INR 12,808cr V/s INR 12,795cr expected V/s INR 12,434cr in 2QFY2018, up 3.1% QoQ. In terms, of the geography the USA posted a QoQ 4.9% CC growth, Europe posted a 1.9% QoQ CC growth & ROW posted a 3.9% CC dip during the quarter. In terms, of the verticals, the Manufacturing and Retail & CPG was the key growth driver for the company registering a CC QoQ growth of 6.6%. Life Sciences & Healthcare posted a QoQ CC growth of 2.4%, while Financial Services posted a moderate 1.4% CC QoQ growth during the quarter. On EBIT front, the company posted an EBIT of 19.6% V/s 19.7% expected V/s 19.7% in 2QFY2018. The margins held up only up on back of 85.8% capacity utilization V/s 86.0% in 2QFY2018. Consequently, the PAT came in at INR 2,194cr V/s INR 2,168cr expected V/s INR 2,188cr in 2QFY2018, growth of 0.3% QoQ.

In terms of guidance, the company expects FY'2018 revenues to grow between 10.5-12.5% in Constant Currency. The above constant currency guidance translates to 12.1% to 14.1% in US$ terms based on December 31, 2017 rates. Operating Margin (EBIT) for FY’2018 is expected from 19.5% to 20.5%. We maintain our ACCUMULATE rating on the stock, with a price target of INR 1,014.”