Dolat Capital: HCL Technologies' Free Cash Flow Zooms; Commentary Comforting
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Dolat Capital Report
HCL Technologies Ltd. reported 4.5% QoQ constant currency growth (our estimate 3.8%) led by strong growth across business segments.
Operating profit margin improved by 108 basis points to 21.6% (our estimate 20.7%) helped by operating efficiency (157 basis points) that funded investment in products and platforms 32 basis points and foreign exchange impact 24 basis points.
Profit after tax up 7.5% QoQ at Rs 31.4 billion. Free cash flow generation took significant leap (swing of over 1 billion dollar YoY basis) given strong earnings growth, low Capex/acquisition investments and improved days sales outstanding (by 11 days YoY).
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