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STOCK IN FOCUS
* HCL Technologies’ stock price rose 1.5% in yesterday’s trade, while the BSE Sensex declined 0.7%.
* HCLT’s 2QFY19 revenue rose 2.1% QoQ in USD terms (3% QoQ in CC terms), with Engineering Services growing 5.9% QoQ.
* The IT major maintained its guidance of 9.5-11.5% revenue growth in CC terms for FY19E, while EBIT margin guidance was maintained at 19.5-20.5%.
* Mode 1 revenue rose 0.3% QoQ in USD terms, Mode 2 rose 4.7% QoQ and Mode 3 rose 10.6% QoQ aided by Actian.
* HCLT has consistently won $1 bn worth of new deals over the past few quarters, driving revenue visibility.
* The IT major’s IP investments should bear fruit over the next few quarters, driving revenue/profit growth.
* We expect HCL Technologies to report around 11% USD revenue CAGR over FY18-FY20E.
* We have a BUY rating on HCL Technologies, with a target price of Rs 1,220.
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