Buy HCL Technologies, target price Rs 1400: Emkay Global

Emkay Global has buy call on HCL Technologies with a target price of Rs 1400. The current market price of HCL Technologies Ltd. is Rs 1125. Time period given by analyst is one year when HCL Technologies Ltd. price can reach defined target.

HCL Technologies Ltd., incorporated in the year 1991, is a Large Cap company (having a market cap of Rs 303957.63 Crore) operating in IT Software sector.

HCL Technologies Ltd. key Products/Revenue Segments include Software Development Charges and Computer Hardware & Software for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 22914.00 Crore, up 1.45 % from last quarter Total Income of Rs 22586.00 Crore and up 15.23 % from last year same quarter Total Income of Rs 19885.00 Crore. Company reported net profit after tax of Rs 3599.00 Crore in latest quarter.

Investment Rationale
The brokerage cuts FY23/FY24 EPS estimates by 3%/2.7%, factoring in Q4 performance and FY23 guidance. Revenue growth momentum is encouraging; however, pressure on Services margin led to earnings cut. It maintains Buy with a TP of Rs1,400 at 22x Mar’24E EPS considering attractive valuations, steady cash generation and ~4% dividend yield

Promoter/FII Holdings
Promoters held 60.72 per cent stake in the company as of 31-Mar-2022, while FIIs owned 18.97 per cent, DIIs 14.68 per cent.