HCL Tech has revenue acceleration and compelling valuations.

Chirag Batavia • 20 December 2021

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HCL Technologies Ltd (HCLTECH)


  • HCL Tech has revenue acceleration and compelling valuations.


  • Deal wins have picked up over the past three quarters.


  • We forecast double-digit services growth rate over the next three years.


  • We expect earnings to grow by 14.4% in FY23E and 11.5% in FY24E.


  • Margins have toughed out in the most recent quarter and will improve.


  • Margin defence will likely be better in FY23E. HCLT has more levers to defend margins than peers.


  • A good capital allocation policy of payout of 75% of net income is welcome.


  • We value services business at 25x September2023E EPS


Note: The above is a brief note on the company, based on the inputs of the KIE research report dated 29th November 2021, which is available on their website at: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Disclaimer: http://bit.ly/2n5AxIE

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