HCL Tech Q3 Results Review - Good Performance, Valuation Attractive: Motilal Oswal

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.HCL Technologies Ltd. delivered a strong revenue growth of 5% QoQ constant currency in Q3 FY23 (inline), led by seasonal gains in HCL Software (products and platform), which was up 30.5% QoQ in CC terms. IT services grew by 2.2% in CC terms with a robust new deal total contract value of $2.3 billion (flat QoQ/up 10% YoY). The company maintained its FY23 U.S. dollar revenue growth guidance of 13.5-14.0% in CC.Further, it delivered a strong beat in Ebit margin at 19.6% (up 165 bps QoQ, 110 bps above our estimate), led by HCL Software, which was up 12.3%. Services margin was largely flat QoQ (inline). HCL Tech narrowed its Ebit margin guidance to lower side at 18-18.5% from 18-19%.Despite seasonality and a tough demand environment, HCL Tech maintained its growth momentum in both IT services and engineering research and development verticals. HCL Software delivered strong growth, ahead of expectations on seasonality. The deal wins remained strong (book to bill of 0.7 times). While there is visible weakness in macro, especially in Europe, increased vendor consolidation deals, a strong pipeline of cost-take out deals, and favorable pricing should help HCL Tech tackle any softness in discretionary spending and weak macro..Click on the attachment to read the full report:.Infosys, HCL Tech, Cyient Q3 Results Review: HDFC Securities.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

HCL Tech Q3 Results Review - Good Performance, Valuation Attractive: Motilal Oswal

Despite seasonality and a tough demand environment, HCL Tech maintained its growth momentum in both IT services, ER&D verticals.

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