Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
Uptick in discretionary IT spend and recovery in the European market will boost volume growth for HCL
Tech. Further, strengthening of EUR against USD will have a positive near-term impact.
What will move the stock?
1) Strongest volume growth of 6.5% QoQ among peers in Q3FY11; 2) Outperformance in emerging verticals
such as energy and utilities and retail; 3) One of the highest bookings in terms of new deals won in the
recent quarter; 4) High growth in IMS and the custom application segment driven by discretionary spend;
5) Higher EBIDTA margins in the near term, supported by higher offshoring and utilization; 6) Absence of
forex losses (cash flow hedges) supporting the bottom line.
Where are we stacked versus consensus?
Our revenue estimates vary from consensus by -2% for FY13. Our FY12 and FY13 EBITDA margin forecasts
are ~50bps higher than consensus. Our FY13 EPS estimate is in line with consensus.
What will challenge our target price?
1) Slower recovery in the US economy; 2) Appreciation of INR vs. USD; 3) Lower discretionary spending;
4) Higher attrition and wage increments.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
Uptick in discretionary IT spend and recovery in the European market will boost volume growth for HCL
Tech. Further, strengthening of EUR against USD will have a positive near-term impact.
What will move the stock?
1) Strongest volume growth of 6.5% QoQ among peers in Q3FY11; 2) Outperformance in emerging verticals
such as energy and utilities and retail; 3) One of the highest bookings in terms of new deals won in the
recent quarter; 4) High growth in IMS and the custom application segment driven by discretionary spend;
5) Higher EBIDTA margins in the near term, supported by higher offshoring and utilization; 6) Absence of
forex losses (cash flow hedges) supporting the bottom line.
Where are we stacked versus consensus?
Our revenue estimates vary from consensus by -2% for FY13. Our FY12 and FY13 EBITDA margin forecasts
are ~50bps higher than consensus. Our FY13 EPS estimate is in line with consensus.
What will challenge our target price?
1) Slower recovery in the US economy; 2) Appreciation of INR vs. USD; 3) Lower discretionary spending;
4) Higher attrition and wage increments.
No comments:
Post a Comment