1
Please refer to important disclosures at the end of this report
1
1
HCL Technologies Limited is engaged in computer programming,
consultancy and related activities. The Company provides a range of
software services, business process outsourcing services and information
technology (IT) infrastructure services. On a five year basis the company’s
revenue CAGR was 18.8%. PAT CAGR was faster at 20%. HCLT maintained
its guidance for FY20 CC revenue growth of 14-16%, with improved organic
growth this quarter (14% YoY CC) leading to the lack of any change despite
one month less IBM product revenue (IBM product business to be
consolidated from 2QYF20). EBIT margin guidance has also been
maintained at 18.5-19.5%, implying recovery over the next 3 quarters.
HCLT’s operating performance was encouraging, aided by execution of
recent deals from major clients like Nokia, Broadcom and Xerox. With IBM
product business to get consolidated in 2QFY20, quartesrly volatility is likely
given the seasonal nature of product business, with 2Q being typically lean.
Further, improving economic growth outlook for the developed
markets, it is expected that in the near to medium term the
revenue visibility is expected to remain good, given HCL Tech’s ability
to bag new deals. The company is virtually debt free. The company has a
reported a healthy return on equity (ROE) of 26.2% for the last 3 years. It has
been maintaining a healthy dividend payout of average 20%. Hence Buy.
BUY
CMP `1,088
0.5
Reuters Code
HCLT.BO
HCLT IN
2
BSE Sensex
37,327
Nifty
11,032
Face Value (`)
IT Consulting
Market Cap (` cr)
1,47,572
52 Week High / Low
1188/920
Avg. Daily Volume
53,280
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
HCL Technologies Ltd
Others |IT Consulting
Aug 08, 2019
2
HCL Technologies Ltd|IT Consulting
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and
Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Limited is a registered entity
with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number INH000000164. Angel
or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities
Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public offering of securities of
the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify,
nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While
Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there may be regulatory,
compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Disclosure of Interest Statement HCL Tech
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)