IDBI Capital: HCL Technologies BUY with Target Price of Rs. 975

*HCL Technologies  (HCLT) has shared details of the IP partnership it had announced at the time of Q1FY17 result.*

*As expected, the 15yr partnership is with IBM* for Automation and DevOps products, platforms and services. The partnership enables a collaborative go-to-market approach in increasing the market for these products and solutions. HCL has licensed IBM technology and will build additional features and functionalities based on business realities and client priorities.

These products/platforms include Tivoli Workload Scheduler, Rational Testing, Rational Change &
Configuration Management (ClearCase and ClearQuest), and Rational Modeling & Construction
(Rational Rose, Rational Software Architect and Rational Application Developer) software for on–
premises, hybrid and public cloud and software as a service (SaaS) platforms.

At its analyst day, HCLT had shared that it expects revenue of US$30-40mn in FY17 and US$100mn in first year. It would invest US$350mn over two years.

*HCLT along with Infosys remains our top-picks amongst IT large-caps. 

We maintain BUY with Target Price of Rs. 975 based on 15x FY18E.*

Report by 

Urmil Shah
IDBI Capital

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