Buy HCL Technologies, target price Rs 1300: Motilal Oswal

Buy HCL Technologies, target price Rs 1300:  Motilal Oswal

Motilal Oswal has buy call on Ltd. with a target price of Rs 1300. The current market price of HCL Technologies Ltd. is Rs 977.75.

HCL Technologies Ltd., incorporated in the year 1991, is a Large Cap company (having a market cap of Rs 268096.54 Crore) operating in IT Software sector.

For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 19491.00 Crore, up 3.71 % from last quarter Total Income of Rs 18793.00 Crore and up 6.55 % from last year same quarter Total Income of Rs 18292.00 Crore. Company reported net profit after tax of Rs 3977.00 Crore in latest quarter.

Investment Rationale
Given its deep capabilities in the IMS space and strategic partnerships, investments in Cloud, and Digital capabilities, the brokerage expects HCLT to emerge stronger on the back of an expected increase in enterprise demand for these services. The stock is currently trading at a modest ~15x FY23E earnings, which offers a margin of safety. Its TP is based on 20x FY23E EPS (a 20% discount to TCS).

Promoter/FII Holdings
Promoters held 60.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 24.9 per cent, DIIs 10.3 per cent and public and others 4.5 per cent.

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