HCL Tech Q1 Review – Growth Optionality At Attractive Valuation: Motilal Oswal

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HCL Technologies Ltd. delivered a growth of 0.7% QoQ (constant currency), below our estimate of 2.4%, led by weak growth in IT Services (up 0.5%) and products and platforms (down 1%), but partially compensated by better than expected engineering research and development (up 4.5%).

Excluding the impact of a one-time bonus in Q4 FY21, Ebit margin was down 80 basis point QoQ and missed our estimate by 130bp due to Covid-19 related expenses of 90bp.

The management reiterated its double-digit U.S. dollar revenue growth guidance and Ebit margin band of 19-21% for FY22.

HCL Technologies’ new deal total contract value stood at $1.7 billion (up 37% YoY, eight large deals) in Q1 FY22.

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Motilal Oswal HCL Technologies Q1FY22 Result Update.pdf


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