HCL Tech: Product Driven Q3 Beat Should Ease Viability Concerns, Says Motilal Oswal

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Motilal Oswal Report

HCL Technologies Ltd. delivered strong revenue growth (3.5% QoQ constant currency terms) in Q3 FY21, above our expectation and its guidance, led by stronger than expected seasonality in the products and platforms vertical (P&P, up 8.3% QoQ in CC) and continued traction in mode two services (up 10.9% QoQ in CC).

We expect the company to return to mid-teens growth in FY22 (14% YoY in CC U.S. dollar) as continued strength in P&P – due to improving deal wins and new client additions – complements improving demand environment in IT Services and research and development verticals.

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