HCL Technologies reported PAT of Rs. 12bn was ahead of estimate led by volume growth and forex gains. During the quarter, HCL booked in excess of US$ 1 Billion, including 12 multi - year deals lending visibility to future growth. We maintain Buy on HCL Technologies. Rikesh Parikh, VP – Equities, Motilal Oswal Securities Ltd
HCL Tech strong quarterly performance was largely backed by 8.6% qoq growth in Infrastructure services (30% of overall revenue). Further, consistent reduction in the direct cost remains the surprise (530 bps contraction in direct cost in last eight quarters). We have a HOLD on stock with target price of Rs.852. At CMP of Rs. 925, the stock is trading at 14.4x FY14E (June YE) and 13.3x FY15E (June YE) EPS estimates.
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Daljeet S Kohli - Head Research IndiaNivesh Securities Private Limited