Growth in core business was ahead of peers – CASINOIN -Sports betting at the casinoin betting company,casinoin online betting, casinoin bookmaker line, casinoin bookmaker bonuses, casinoin bookmaker, casinoin bookmaker, casinoin sports betting, casinoin bookmaker, casinoin bookmaker,

HCL Tech (HCLT) reported Q4FY22 revenue of $2,993 mn (up 0.5% q-o-q), missing our forecast of $3,052 mn while beating Street’s forecasts of $2,968 mn. Ebit margin came in at 17.9%, missing our/Street’s forecasts of 18.3%/18.2%. PAT was Rs 35.9 bn, which was higher than our/Street’s forecast.

HCLT reported Services revenue growth of 5% q-o-q (IT and Business Services and ER&D), the highest amongst its peers. ACV for FY22 grew 21% y-o-y, much higher than revenue growth of 12.8%, which bodes well for growth going ahead. Our EPS estimates have changed by -3.8%/-2.4% for FY23E/ FY24E. Maintain ‘Buy’ with a TP of Rs 1,710.

Broad-based growth in Services business: HCLT reported revenue growth of 1.1% in CC. IT and Business Services/Engineering and R&D Services business grew 5.2%/3.9% q-o-q. Separately, Products & Platforms revenue declined by 24% q-o-q. Revenue growth q-o-q was led by Telecom, Media, Publishing & Entertainment (6.8%), followed by Manufacturing (4.3%), Lifesciences & Healthcare (4.1%), and Public Services (3.2%). LTM attrition inched up to 21.9% compared to 19.8% last quarter, which was still lower than the industry.

Numerical guidance for FY23e: HCLT’s FY23E growth guidance is in the range of 12-14% – after FY22’s double-digit guidance. This reflects better demand visibility and better execution capability than last year. Margin guidance was 18-20% for FY23E. TCV of new deal wins came in at $2,260 mn, up 6% q-o-q. This quarter again included a significant number of small deals.

Upcycle to be sustained – Revenue growth in the Core Services business was industry leading, although the Product business weighed on overall growth. However, with the Product business’ portion reducing to 10.2%, we believe overall growth would start strengthening. Retain ‘BUY/SO’ with a TP of `1,710 (28x Q2FY24E) as we roll forward to Q2FY24E.

casinoin

.

Author: Howard Caldwell