Buy HCL Technologies Ltd For Target Rs. 1,800 by Motilal Oswal Financial Services Ltd
* HCL is expected to report 0.6% QoQ CC decline due to planned megadeal reductions, tapering of deals in telecom, and seasonal weakness in the P&P segment (- 12% QoQ).
* ER&D and manufacturing softness may weigh on 4Q performance, while BFSI stays stable, and Hi-tech shows early signs of revival.
* Margins are expected to decline by 190bp QoQ in 4Q, driven by a 50-60bp impact from wage hikes and highmargin P&P business de-growth.
* We expect the company to provide initial FY26 revenue growth guidance of ~3-5%, with stable EBIT margin. Commentary on deal TCV and the demand trends around BFSI, Hi-tech & ERD space would be watched out for.
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