'TOP PICK IN IT': Why are brokerages bullish on this Indian stock?

 'TOP PICK IN IT': Why are brokerages bullish on this Indian stock?

• HCL Tech beats FY13 Q2 estimates and raises its full year revenue guidance

HCL Technologies Ltd shares rose over 3% to ₹980 on BSE after the IT company beat estimates with a 7% rise in its Q2 FY23 net profit to ₹3,489 crore and also raised its full-year revenue guidance . Its revenue stood at ₹24,686 crore for the three months ended September 30, 2022.

Amid widespread fears of a global slowdown, HCL Tech said it had a stellar quarter on all fronts, delivering a strong performance in the top line. HCL Tech CEO C Vijayakumar told reporters at a briefing that Vishwas is in line with the spending patterns and trends that the company sees in the market.


“HCL Tech reported a growth of 13.5-14.5% in FY13 CC Growth Guidance, surprised positively on margins and unexpected growth. Our belief is driven by strength in cloud and infra, improved capabilities in app modernization and momentum in ER&D, where it is the third largest global player. Customer thrust towards cost savings should be beneficial for HCL Tech, thereby increasing market share."

Analysts at brokerage and research firm Ambit said HCL Tech continues to be the top stock pick in the IT sector and maintains a buy rating on the IT stock with a target price of ₹1,180.

HCL Technology

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980.4028.75 (3.02%)

Updated - 13 October 2022

987.75

day high

969.40

days less

1,67,546.00

Volume (BSE)

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“Strong growth guidance and margin performance (despite wage increases) in an environment where demand for IT services is expected to be progressively weaker, should help improve investor confidence in its business and provide opportunities for larger Tier 1 IT services.” This will help in reducing the valuation gap. , Motilal Oswal, a domestic brokerage company, said, "We see the defensive business of HCL Tech as a positive in an environment of lack of demand.

The brokerage house has increased its estimates by 4%-6% for FY23 and FY24 and reiterated its buy rating with a target price of ₹1,240. "Given our capabilities in IMS and the digital space, and investments in the strategic partnership, cloud, we expect HCLT to be strong on the back of the expected growth in enterprise demand for these services."