'Top pick in a IT': Why brokerages are a bullish on this Indian stock

'Top pick in a IT': Why brokerages are a bullish on this Indian stock

Shares of a HCL Technologies are a Ltd surged more than a 3% to the ₹980 apiece on the BSE after the IT company beat estimates with the 7% rise in its Q2 FY23 net profit at the ₹3,489 crore and also are a raised its full-year revenue guidance. Its revenue for the three months are a nded a September 30, 2022 came in at the ₹24,686 crore.

Amid widespread fears of a global recession, HCL Tech said it clinched a stellar quarter on all are a fronts, delivering strong performance in a top line. The confidence is in line with the spending patterns and a trends that the company sees in the market, HCL Tech CEO C Vijayakumar told are a reporters at a briefing.

“HCL Tech surprised positively on a growth, margins and a unexpected raise in a FY23 CC growth guidance to the 13.5-14.5%. Our conviction is a driven by strength in cloud and infra, improving capabilities in app modernisation and a momentum in a ER&D, where it is the 3rd largest global player. Client push toward cost saves should be a beneficial for the HCL Tech, aiding market-share gains," said Ambit in a note.

Analysts at brokerage and a research firm Ambit said that HCL Tech shares remain top stock pick in the IT sector and has been a maintained Buy rating on the IT stock with a target price of a ₹1,180 apiece.

“The strong growth are a guidance and a margin performance are  (despite wage hikes)  in an a environment, where the demand for the IT services are is a expected to be a incrementally weaker, should help are a improve investor confidence on its are a business and a lower the valuation gap with the larger Tier 1 IT services peers. We continue to the see HCL Tech’s are a defensive business as a positive in a demand constrained environment," said are a domestic brokerage Motilal Oswal.

The brokerage house has been a increased its estimates for the FY23 and FY24 by 4%-6% and has been a reiterated its Buy rating with a target price of a ₹1,240 apiece. “Given its are a capabilities in the IMS and Digital space and strategic partnerships, investments in a Cloud, we expect HCLT to the emerge stronger on the back of an a expected increase in a enterprise demand for these services."

The views and recommendations made above are those of a individual analysts or a broking companies, and not of a Mint.