Angel Broking has recommended a reduce rating on HCL Technologies with a target price of Rs 96 in its April 02, 2009 research report.
“HCL Technologies’ Axon acquisition, while a long-term positive, is expensive and will lead to Margin and Bottom-line pressures, given lower Margins of Axon, USD 585 million debt taken on and goodwill write offs. The slowdown has led to greater uncertainty in HCL’s prospects and has started reflecting in its financials. Even as valuations are at historic lows, we see little scope of re-rating, given the headwinds faced by the company and 1.4% EPS compounded fall estimated over FY2008-10E. We Initiate Coverage on the stock with a Reduce recommendation and target price of Rs 96, implying a P/E of 6x FY2010E EPS,” says Angel Broking’s research report.
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