Motilal Oswal: HCL Technologies - Cloud Demand To Boost FY22 Growth
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Motilal Oswal Report
HCL Technologies Ltd. delivered strong revenue growth (4.5% QoQ constant currency terms) on the back of broad-based recovery across geographies, verticals, and services.
Ebit margin expansion (up 110 basis point QoQ), driven by operating leverage, was better than expected.
The company also revised its FY21 margin guidance upward (by 50 basis point to 20–21%) despite a potential wage hike in 3Q/4Q.
This indicates its ability to sustain some amount of margin improvement, which is a positive.
The company reported 15 transformational wins, all from new clients, exhibiting its ability to capture a larger share of client wallets.
In our view, the company would continue to benefit from demand for digital services – especially in cloud migration (digital foundation) work – which should help it deliver 11% revenue growth in FY22.
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