HCL Tech: Tepid Q4 Guidance Not Different From That Of Infosys’; Products Look Up, Says Nirmal Bang
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Nirmal Bang Report
HCL Technologies Ltd. delivered above-guidance revenue growth and margins for Q3 FY21.
Revenue grew by 3.5% constant currency QoQ (guidance was 1.5-2.5%) and Ebit margin came in at 22.9%, which was an outsized beat versus our estimate of 21%.
The one-month run-up of approximately 16% in the stock price was likely factoring in a bigger beat, especially after superlative Q3 of Tata Consultancy Services Ltd. and Infosys Ltd.
The 2-3% QoQ guidance of Q4 (including 1% from DWS acquisition) was a tad disappointing in the context of high expectations, but in line with the 0-2% implied guidance of Infosys.
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