Tuesday, August 25, 2009

[Investors Please Listen] HCL Technologies Q4FY09 ResultUpdate ; In line with our expectations; time to play catch up ACCUMULATE with a TP of Rs 330,

HCL Tech reported revenues of US$ 607.2 mn (+7.9% QoQ). Revenues in constant currency up ~4% sequentially. Revenues in Applications business (+4.5% QoQ) to US$ 441.5 mn while IMS revenues jump up by ~25.5% sequentially (included US$ 7 mn of pass through revenues)

Operating margin performance encouraging with EBITDA mgns at 21.5%, up 90 bps QoQ driven by better than anticipated margins in Applications and BPO business.

Net profits at Rs 3088 mn (+57.5% QoQ,+162% YoY) in line with expectations driven by revenue/margin beat despite higher than estimated taxes (co made provision for earlier exemptions driven by changes in Income tax rules).

Upping FY10/FY11 EPS estimates by ~7.4%%/29% to Rs 16.1/23.9 driven majorily by higher margin assumptions and lower estimated forex losses (OCI losses reduced from US$ 225 in March'09 to US$ 162 mn by INR appreciation) 

Up rating to ACCUMULATE with a TP of Rs 330, based on 13.5x 1 year rolling forward P/E multiple.  Expect more meaningful EPS upgrades from street to drive the stock price higher.


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The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
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