HCL Technologies Revenue performance disappoints, retain HOLD ::Emkay,

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HCL Technologies

Revenue performance disappoints, retain HOLD

HOLD

CMP: Rs401                                        Target Price: Rs415

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n     Rev at US$ 1002 mn (+4.1% QoQ) below est with IMS (+4.3% QoQ) after strong show over the past few qtrs.  IT Svcs grew by ~4.5% QoQ while BPO’s struggle continues
(-2.5% QoQ)

n     EBITDA mgns at 16.7%, down by ~130 bps QoQ (within mgmt’s guided range of ~150 bps decline) aided by weak currency

n     Op metrics performance mixed. Revenue growth led by US(+6.8% QoQ), Engg svcs(+9% QoQ) while top clients grew lower than co average for the 3rd quarter in a row

n     Lower currency resets drive 4/5% raise in FY12/13E EPs to Rs 32.5/36.5 despite marginal cuts in revenue assumptions. Retain HOLD with a revised TP of Rs 415( V/s Rs 390 earlier)