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Information Technology: HCL Technology (HCLT.BO, Buy)
• We believe HCL Tech’s core expertise in the RIM space will lead to RIM growth of 40% in FY11E. We expect RIM to grow by 7% sequentially
over the next 2 quarters
• We believe the return of discretionary spending in packaged application areas could provide potential upside risk to our forecasts
• We forecast FY10-FY13E revenue CAGR of 22%, in-line with the sector. We expect earnings CAGR of 27% over the period, which is the
highest in our Indian large cap IT services space
HCL Technologies: Discount to peers accentuated on Director’s Cut
> Valuations are at a discount to its historical average and peers on 1-year forward P/E
> While returns expand, we expect to see discount to sector narrowing
RIM/EAS services to contribute a greater part of HCLT revenues
12-m target price of Rs574 based on Director’s Cut implies FY12E P/E of 17.4X vs. large cap avg. of 21.5X
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Information Technology: HCL Technology (HCLT.BO, Buy)
• We believe HCL Tech’s core expertise in the RIM space will lead to RIM growth of 40% in FY11E. We expect RIM to grow by 7% sequentially
over the next 2 quarters
• We believe the return of discretionary spending in packaged application areas could provide potential upside risk to our forecasts
• We forecast FY10-FY13E revenue CAGR of 22%, in-line with the sector. We expect earnings CAGR of 27% over the period, which is the
highest in our Indian large cap IT services space
HCL Technologies: Discount to peers accentuated on Director’s Cut
> Valuations are at a discount to its historical average and peers on 1-year forward P/E
> While returns expand, we expect to see discount to sector narrowing
RIM/EAS services to contribute a greater part of HCLT revenues
12-m target price of Rs574 based on Director’s Cut implies FY12E P/E of 17.4X vs. large cap avg. of 21.5X
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