Motilal Oswal Reiterates Buy On IT Stock, Sees 20% Gains, Declares Rs 18/Share Interim Dividend

Motilal Oswal assigns a "Buy" on HCL Technolog\ies Ltd for gains up to 20% with a target price of Rs 1,250 apiece. HCL Technologies in its Board meeting held on April 20, 2023, declared an interim dividend of Rs 18/share for the financial year 2022-23. This is an IT sector large-cap company with a market capitalisation of Rs 2,84,649 crore.

Stock's Current Market Price, Returns and 52-Week Low/High

The last traded share price of HCL Technologies on NSE is Rs 1,048.95 apiece, up 1.10% from its previous close. The stock recorded its 52 week low on 15 July 2022 at Rs 877.35 apiece and 52 week high on 3 February 2023 at Rs 1,156.65 apiece, respectively.

The stock has fallen 2.14% in the past 1 week, 3.22% in 1 month and 5.31% in 3 months, respectively. It has fallen 4.57% in 1 year. It has given 130.18% positive return in 3 years and 97.48% positive return in 5 years.

Declared an interim Dividend of Rs 18/share

In its exchange filing on 20 April 2023, the Board of Directors of HCL Technologies Ltd. said, "The Board of Directors has declared an Interim Dividend of Rs.18/- per equity share of Rs.2/- each of the Company for the Financial Year 2023-24. The Record date of April 28, 2023 fixed for the payment of the aforesaid interim dividend has been confirmed by the Board of Directors. The payment date of the said interim dividend shall be May 9, 2023. "

Valuations offer a margin of safety; reiterate BUY

According to Motilal Oswal, Higher exposure to Cloud, which comprises a larger share of non-discretionary spends, offers a better resilience to its portfolio in the current context, with higher demand for Cloud, Network, Security, and Digital workplace services. An easing supply scenario and a strong margin trajectory provide comfort on margins for the company. "Given its capabilities in the IMS and Digital space along with strategic partnerships and investments in Cloud, we expect HCLT to emerge stronger on the back of healthy demand for these services in the medium term. The stock is trading at ~15x FY25E EPS, which offers a margin of safety. Our TP of INR1,250 is based on 18x FY25E EPS. We reiterate our BUY rating," said Motilal Oswal.

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