ADVERTISEMENT

Analysts Hike Price Targets For HCL Technologies After Q3 Results

Most analysts have retained HCL Technologies as their top pick in the IT services sector.

The HCL Technologies Ltd. Jigani campus stands deserted in Bengaluru, India (Photographer Samyukta Lakshmi/Bloomberg)
The HCL Technologies Ltd. Jigani campus stands deserted in Bengaluru, India (Photographer Samyukta Lakshmi/Bloomberg)

Analysts lauded HCL Technologies Ltd.’s growth in products & platforms business, increasing exposure in engineering and R&D, and reasonable valuations, among others, as they hiked price targets for the software services provider after the third quarter.

The company’s revenue rose 3.8% over the preceding three months to Rs 19,302 crore in the October-December, according to an exchange filing. Its EBIT margin expanded to 22.22% from 21.59% despite wage hikes. Net and operating income, too, increased during the period.

HCL Tech even raised its revenue guidance to 2-3% for the quarter ending March from 1.5%-2.5% growth forecast earlier. It expects EBIT margin for FY21 to be in the range of 21-21.5% against 20-21% predicted earlier.

While analysts see the company’s guidance as disappointing, they maintained their bullish investment recommendation on the stock. Of the 47 analysts tracking HCL Technologies, 42 have a ‘buy’ rating, four suggest a ‘hold’ and one recommends a ‘sell’.

Shares of HCL Technologies are trading little changed in Monday's trading session. Based on the 12-month Bloomberg consensus data, the stock has a return potential of 13%.

Opinion
HCL Technologies Q3 Results: FY21 Margin Guidance Raised

Here’s what analysts have to say about HCL Tech’s Q3 results...