HCL Tech’s Valuation Continues To Discount Product Opportunity: Motilal Oswal
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Motilal Oswal Report
HCL Technologies Ltd. remains one the most attractive stocks in our coverage, trading at 15 times FY23E price-to-earnings (38%/26% discount to Tata Consultancy Services Ltd./Infosys Ltd.), despite delivering 20% earnings growth in FY21 year-to-date.
We expect this discount to narrow as it benefits from increasing cloud spend, given its large exposure to IT infrastructure.
It can potentially re-rate if it continues to deliver growth in the software product business, which remains a key overhang on the stock price, despite outperforming expectations over the last two quarters.
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