HCL Tech Q3 Review - Growth Acceleration To Compensate For Margin Hit: Motilal Oswal
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Motilal Oswal Report
HCL Technologies Ltd. delivered an exceptionally strong revenue growth of 7.6% QoQ constant currency in Q3 FY22, 310 basis points above our estimate, led by its troubled products and platforms (up 24.5% QoQ) vertical, which did exceptionally well despite benefitting from seasonality and deal spill over from Q2 FY22 (600 bps impact).
Its services verticals (IT services/engineering research and development up 4.7%/8.3% QoQ CC) continued to clock strong growth and was ahead of our estimate.
HCL Tech reported strong new deal total contract value of $2.1 billion (flat QoQ, up 64% YoY).
EBIT margin at 19% (flat QoQ) missed our estimate by only 40 bps, but was impacted by large variance in the margin of IT services and produtcs and platforms.
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