HCL Technologies (HCLT) offers IT, ER&D and products to BFSI, retail, health, telecommunication, manufacturing, media & hi-tech verticals.
HCLT reported strong growth in IT services.
HCLT’s share price has grown by ~2.9x over the past five years (from ~₹ 376 in April 2017 to ~₹ 1,101 levels in April 2022).
We value HCLT at ₹ 1220 i.e. 22x P/E on FY24E EPS
Apart from HCLT, in our IT coverage we also like TechM.
|Particulars||FY19||FY20||FY21||FY22||5 Year CAGR(FY17-FY22)||FY23E||FY24E||2 Year CAGR (FY22-FY24E)|
|EBITDA Margins (%)||23.1||23.6||25.8||23.4||-||21.8||21.6||-|
|Q4FY22||Q4FY22E||Q4FY21||YoY (%)||Q3FY22||QoQ (%)||Comments|
|Revenue||22,597||22,781||19,642||15.0||22,331||1.2||Revenue was up 1.2% QoQ, IT services business grew by 5.2% QoQ in CC while P&P business declined 24% QoQ in CC|
|Cost of sales (including||14,672||14,716||12,650||16.0||14,309||2.5|
|Gross margin (%)||35.1||35.4||35.6||-53 bps||35.9||-85 bps|
|Selling & marketing costs||2,872||2,848||2,470||16.3||2,780||3.3|
|EBITDA Margin (%)||22.4||22.9||23.0||-66 bps||23.5||-111 bps|
|EBIT Margin (%)||18.0||18.2||17.3||67 bps||19.0||-103 bps||EBIT margin of services business ( IT sevices and ER&D together) impoved by 80bps QoQ due to base impact|
|Tax paid||721||998||1,191||-39.5||997||-27.7||PAT was higher due to lower tax expenses|
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