Operating margins were also better than street expectations as the numbers improved to 20.2 per cent - highest in past eleven quarters led by better product mix and operational efficiency.
The company raised its full-year revenue growth guidance to 16.5-17 per cent in constant currency (CC) terms from 15-17 per cent earlier. Further, the company expects FY20 operating margin (EBIT) to come in the range of 19-19.5 per cent from 18.5-19.5 per cent earlier.
Analysts at Antique Stock Broking maintain ‘buy’ rating on HCL Tech with the price target of Rs 700 per share.
“For FY20 we expect HCL Tech to report CC organic growth of 10.8 per cent which is highest among top-4 IT services companies. However expect organic growth to slow down to 7.8 per cent in FY21e as company didn't sign any mega deals like we saw at the end of last fiscal year,” the brokerage firm said in a result review note.
“Despite the organic growth moderation in FY21E as compared to FY20E in the absence of mega deals, HCL Tech’s growth leadership is intact supported by strongest-ever deal pipeline and improvement in conversions, enhanced services/product bouquet with large cross-sell opportunities. Superior operating profile and cross-sell synergies, make up to some extent for the capital intensity and longevity concerns of the product business,” analysts at HDFC Securities said in the result review report. The brokerage firm has set 12-month target price of Rs 665 per share.
At 09:47 am, HCL Tech was trading 1.4 per cent lower at Rs 590 on the BSE, 133 points or 0.32 per cent fall in the S&P BSE Sensex. A combined 4.07 million equity shares changed hands on the counter on the BSE and NSE so far.