HCL Tech can Continue to Outperform the Sector
In a weak environment for the IT sector, HCL Technologies has reported stable and better-than-expected earnings in the second quarter ended September 30. HCL Tech’s Q2 consolidated net profit surged 16.7 percent to Rs 2,015 crore (YoY), while dollar revenue was at USD 1,722 million.
It has reiterated FY17 constant currency guidance at 12-14 percent and EBIT guidance to 19.5-20.5 percent. Sanjiv Bhasin of IIFL is enthused about the company’s positive guidance on margins and volumes. He said HCL Tech’s inconsistency in margins saw peers Tata Consultancy Services (TCS) and Infosys get higher valuations, he told.
IIFL is overweight on stocks such as HCL Tech and Wipro, he added. Bhasin said HCL Tech can continue to outperform the sector. He added that a target price of Rs 900 in the next 6-9 months in on the cards. Given the likes of TCS and Infosys expecting a growth of 7-8 percent, HCL Tech organically grew at 9-11 percent, said Karan Taurani of Dolat Capital. He expects the company will outperform peers in terms of stock performance.
In a weak environment for the IT sector, HCL Technologies has reported stable and better-than-expected earnings in the second quarter ended September 30. HCL Tech’s Q2 consolidated net profit surged 16.7 percent to Rs 2,015 crore (YoY), while dollar revenue was at USD 1,722 million. 
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