HCL Technologies
BSE SENSEX
28,060
S&P CNX
8,650
24 August 2016
Update
| Sector:
Technology
CMP: INR787
TP: INR940 (+19%)
Buy
Unleashes future growth strategy…
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
Financials Snapshot (INR b)
Y/E Mar
2016
2017E
2018E
…by focus on new areas to offset cannibalization in IMS and Applications
HCLT IN
1410.756
986 / 707
7/-25/-24
1110
16.5
1796
39.6
Net Sales
EBITDA (INR b)
Net Profit
EPS
EPSGr. (%)
BV/Sh. (INR)
P/E (x)
P/BV (x)
RoE (%)
RoCE (%)
311.4
68.2
56.7
40.1
-20.3
200.2
19.6
3.9
21.5
19.9
474.1
100.1
80.1
56.3
40.4
235.3
14.0
3.3
26.3
24.1
544.0
113.8
89.9
62.8
11.4
276.2
12.5
2.8
25.1
23.3
We attended HCL Technologies’ (HCLT) analyst meet, where the company
st
demonstrated its strategy to cater to a 21 century enterprise. The company
elaborated on its progress in Automation and Digitalization, where it has been
building end-to-end capabilities to transform the Enterprise.
The company introduced its growth strategy for FY17 and beyond, which is based on
different approaches for the following three modes: Mode 1 – Existing core services
(Engineering and ITO); Mode 2 – Businesses that are at an inflection point (cloud,
Security, Digital and IoT); and Mode 3 – Innovative IP partnership opportunities.
HCLT’s scale and capabilities position it nicely in the transforming market. Its strides
in Automation, investments and holistic approach on Digital should help offset the
cannibalization from infra and applications shift to public cloud. It re-iterated its FY17
guidance of revenue growth of 12-14% in CC and EBIT margin range of 19.5-20.5%.
Growth strategy for FY17 and beyond: Three modes
HCLT introduced its growth strategy for FY17 and beyond, which is based on taking
a differentiated approach for the three areas of services:
Mode 1 - Application Services, Infrastructure Services, Engineering & R&D
Services; Business Process Outsourcing:
Offers opportunity at the current
growth rate for the next few years owing to the large underserviced market
(penetration of outsourcing is still below 50%), increased participation and win
rates.
Mode 2 – Cloud Services, Security Services, BEYONDigital, IoT WoRKS:
Offers
opportunity to grow 20-30% YoY for next several years as these businesses are
at an inflection point, providing high growth opportunities in markets that are
fragmented and have no clear leaders.
Mode 3 – Products & Platforms (Ecosystem driven):
Modest goals driven by
strategic opportunities through partnerships for products and platforms.
Shareholding pattern (%)
As On
Jun-16 Mar-16 Jun-15
Promoter
60.4
60.4
60.6
DII
6.6
5.7
4.5
FII
25.7
26.9
28.9
Others
7.4
7.0
6.0
FII Includes depository receipts
Stock Performance (1-year)
HCL Technologies
Sensex - Rebased
1,100
1,000
900
800
700
600
Leveraging DryICE drive better win rates
HCLT’s DryICE platform combines Autonomics and Orchestration. Its strategy and
approach encompass automation across service lines (focusing on the core) by
leveraging Artificial Intelligence to drive real world benefits. DryICE has been used
to drive 20-60% cost reduction, depending on the maturity of services and
automation on a case-to-case basis. The success of DryICE is reflected in the fact
that it has impacted 90% of new wins for HCLT. DryICE is currently being used by
54% of its existing customers, reflecting its acceptance on the current base.
Holistic Digital strategy
HCLT’s Digital revenue forms ~25% of its Application Services revenue. Its strategy
spans across Digital Engagement Platforms, Modern Application Development and
Analytics. In line with this, it has carved out BEYONDigital, which is a broad-based
digital transformation unit having 15,000+ practitioners and over 200 client
relationships. HCLT’s positioning is being augmented by its Design practice, Digital
platform development, Ops transformation through DryICE and global co-
innovation labs.
Ashish Chopra
(Ashish.Chopra@MotilalOswal.com); +91 22 6129 1530
Sagar Lele
(Sagar.Lele@MotilalOswal.com); +91 22 6129 1531
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

HCL Technologies
Prowess in IMS to continue aiding growth
HCLT has USD2.4b IMS practice, which grew 23% YoY in FY16. It added 23 new
customers in the last 12 months, and demonstrated multiple successful executions
for transformational deals greater than USD250m in size. Its prowess in the area is
reflected by: [1] 45% win rate, [2] 95% renewal rate, [3] 71% revenue from G2000
customers and [4] leadership in industry analyst reports. It sees a promising
opportunity, given 49% outsourcing penetration in infrastructure and annual infra
renewals to the tune of USD79b in TCV. Moreover, there stands a large cross-sell
opportunity because of HCLT’s presence in the Apps and ERS business.
Leadership in Engineering Services lends itself to IoT opportunity
Engineering Services outsourcing market is largely underpenetrated, and is expected
to grow 13-15% through 2020. HCLT, being the largest ER&D services provider, is set
to benefit from this trend, given [1] investments in IoT, data analytics, test labs, etc.,
[2] capabilities across verticals and horizontals, and [3] customer base, which
includes 54 of the top 100 R&D spenders. It has been further accelerating growth
through its focus on IoT, wherein it has been winning one new customer every
month, has achieved 10x growth in quarterly revenue run-rate in three quarters
since formation, and has seen 7x growth in qualified funnel during the same period.
Gearing up for next leg of growth, retains healthy guidance for FY17
With the introduction of HCLT’s growth strategy for FY17 and beyond, it has been
working toward improving its positioning in traditional services and augmenting
presence in newer services, a combination of which is expected to bode well in the
medium-to-long term. 2 months on following the Brexit news, HCLT is not
witnessing any impact from the same on the business just yet. The company
maintained its FY17 guidance of revenue growth of 12-14% in CC and EBIT margin
range of 19.5-20.5%. Over the medium-to-long term, HCLT’s capabilities in IMS and
Engineering Services, coupled with increasing presence in Digital, are likely to keep
the company in good stead. Our target price of INR940 discounts FY18E earnings by
15x, implying 19% upside. Maintain Buy.
24 August 2016
2

HCL Technologies
Exhibit 1: Growth strategy for FY17 and beyond...
Source: Company
Application Services – Leveraging Digital
HCLT’s Application Services business constitutes to 40% of total revenue. There are
multiple dynamics playing out in each of its constituents. Its practice is broadly
spread over Enterprise Package Services (20-25% of revenue), Application
Development (50-60%) and Application Managed Services (15-30%).
Re-architecting the Enterprise Package Services portfolio
The ERP space has been impacted by the migration to cloud, and saw a decline
of ~20% last year. To tackle the shift from on-premise to cloud, HCLT has been
augmenting its presence in Enterprise Cloud. It is a leading SAP SI and Global
Tier-I SAP partner, with 9,000+ consultants, and 350+ customers. Customers are
increasingly being forced to re-look at their SAP architecture; in-line with SAP’s
cloud-first strategy. This is likely to result in pain in the short-term as deal sized
and duration reduce, causing pressure on revenue growth. However, the
company is utilizing this period to re-architect capabilities and increase
relevance for the future.
Similarly, it has also built capabilities around Microsoft Dynamics. HCLT has 235
practitioners in Microsoft Dynamics and 1,384 customers. It added these
capabilities through the acquisition of PowerObjects, which is a leading provider
of Dynamics CRM services worldwide.
Application Development merging into Digital
HCLT’s Digital strategy spans across Digital Engagement Platforms, Modern
Application Development and Analytics. In line with this, it has carved out
BEYONDigital, which is a broad-based digital transformation unit.
BEYONDigital has 15,000+ practitioners and over a 100 customers. It is based on
the four pillars of [1] Design Thinking, [2] UI/UX Management, [3] Digital
Platforms, and [4] Intelligent Analytics. It has a broad service portfolio that
spans across the areas of Digital Marketing, Digital Commerce, Modern
Application Development and Analytics, which leverages HCLT’s tools and IP like
BrandeX, IllumInfo, ALMSmart, PRIZM, DAT, BIG BYTES, DMF, R2D2 and BAS
EDGE.
24 August 2016
3

HCL Technologies
Differentiating Application Support through DryICE
The application management market at USD72.8b in 2016 is expected to grow at
5.6% CAGR through 2020. HCLT has been differentiating in this market using its
DryICE framework, focusing on improving stability, user experience and service
efficiency.
Exhibit 2: Real world examples of DryICE
Source: Company
Exhibit 3: Application Management Services continues to represent opportunity
CAGR 2015-20
5.6
3.0
6.2
4.8
3.9
0.2
-2.2
4.5
Source: Company
Infrastructure Services – strong market opportunity
HCLT’s Infrastructure Services business is spread across the service lines of Data
Center & Cloud Services, Workplace Services, Network Services, Security & GRC
and Enterprise Platform Services. The practice has revenue of USD2.35b,
employs 34,000 people across 240+ customers.
Infrastructure Services revenue grew by 23% YoY in FY16 as the company added
23 new customers. It has successfully executed multiple transformation deals
that are over USD250m in size. It has demonstrated a win rate of 45%, and 48%
of its deals are won against global competition.
The drive to improve productivity has been rampant, and automation levers
have been applied in more than 54% of the accounts. This has resulted in an
average 35% reduction in human effort. Moreover, the Fixed Price project
dominance enhances the impact of Automation. HCLT is going through an
24 August 2016
4

HCL Technologies
intensive training program aimed at reskilling resources in Automation and
Digital.
The market opportunity remains strong led by
First time outsourcers
– 51% of the G2000 have not yet outsourced
Strong rebid market
– Total value of rebids stands at USD22.6b (ACV) and
USD79.8b (TCV)
Strong positioning
– HCLT has a win ratio of 40%, which makes it strongly
positioned to capture the opportunity
HCLT has acquired several capabilities through acquisitions and investments –
Volvo IT (market access, new service capability), point to point (workplace
services transformation and systems integration and MOOG (IT operations
transformation through Artificial Intelligence).
Exhibit 4: IMS has been a significant growth driver for HCLT
IMS Revenues
% of overall revenues
% of incremental revenues
68
41
16
23
21
23
30
24
29
29
67
54
34
35
41
37
FY09
FY10
FY11
FY12
FY13
FY14
FY15
LTM
Source: MOSL, Company
Engineering Services – strong market opportunity
The ER&D outsourcing market has been fairly underpenetrated, and is expected
to grow 13-15% reaching USD37-45b by 2020. As per NASSCOM, India currently
captures a 28% share of the global offshored ER&D, which is expected to grow
to ~35% by the end of 2020.
HCLT is the largest player in India in this space, and has capabilities spread
across 8 major verticals. It has made several investments over the last few years
that have resulted in this dominance. End-to-end product development
capabilities, focus on IoT, and investments in test labs have been improving
positioning.
It has been demonstrating growth through large deals, which have been a
function of [1] Product Carve Outs (of legacy products), [2] Rebadging of
Workforce (context specific skillsets/technologies), [3] Vendor Consolidation
(using risk reward models), [4] Managed Services (for specific
programs/processes), [5] Product Partnerships (of matured products) and [6]
Technology partnerships (of technologies with skill gaps at scale).
HCLT follows a three pronged M&A approach in this space – Niche Tech M&A
for acquisition of skills (C2SiS), Account Specific M&A (Trygstad) and Growth Gap
M&A for complementary fitment, scale and customer acquisition (Geometric).
24 August 2016
5

HCL Technologies
Exhibit 5: ER&D contributing significantly to growth...
Incremental Revenue Contribution (%)
IMS
67.3
ER&D
67.4
36.5
21.6
8.6
FY12
FY13
9.3
FY14
FY15
LTM
Source: MOSL, Company
21.6
22.2
64.9
30.3
15.9
29.5
FY11
Exhibit 6: Sourcing very low in ER&D compared to IT
Services and BPM
Sourcing share in global spend (%)
34%
Exhibit 7: India has scope for market share gain in the ER&D
sourcing market
India's share in global sourcing (%)
61%
38%
14%
5%
IT services
BPM
ER&D
Source: MOSL, NASSCOM
IT services
BPM
ER&D
Source: MOSL, NASSCOM
25%
Exhibit 8: India gaining share in the ER&D ecosystem
Growth in 2014 (YoY, %)
12%
Exhibit 9: Market largely untapped
Global ER&D
spend
(USD1,440b)
Global
sourcing
market
(USD68b)
8%
3%
India's ER&D
market
(USD17b)
Global sourcing
India's ER&D market
Source: MOSL, Company
Source: MOSL, Company
Global ER&D spend
24 August 2016
6

HCL Technologies
Valuation view
HCLT’s differentiated positioning in IMS has helped it grow ahead of the industry
average in the last few years and additionally its capabilities in Engineering
Services have compounded to that in CY15. Disconcertingly however, the rapid
decline in margins (185bp LTM YoY); combined with the lack of clarity on
negative impact of the integration of Volvo, need for investments in the organic
business and the absence of guidance, raised concerns around resurrection of
profitability. This led to downward revision of margin estimates, well below the
21-22% range the management had earlier stated. However, the newly guided
19.5-20.5% EBIT margin range provides visibility on the quantum of pressure,
and subsequently also results in upgrades from earlier expectations, that built n
conservatism.
While 9MFY16 was relatively muted, led by delayed transition in IMS deals and
some softness in select verticals; improvement has started to reflect in revenue
growth for IMS. However, consistent 0-1% QoQ growth in Application Services
(40% of total revenue) and a pause in strength in BFSI (25% of total revenue) has
been weighing on overall performance.
1. IMS, which grew at a CAGR of 30% over FY10-15, and contributed 46% of
HCLT’s incremental revenues during this period, saw some slowness in YoY
growth momentum in recent quarters. While this raised fears of competitive
intensity taking its toll, deal signings have remained healthy, and we expect
growth in IMS to remain strong at least in the foreseeable future. HCLT
enjoys a healthy lead as far as scale in IMS is concerned, with FY15 revenue
of USD2.2b+.
2. Total estimated spend on Engineering Services and R&D is USD1.4t, of which
exports from India are pegged at merely USD12.5b. ~50% of this is serviced
out of captives, while the remainder is outsourced to third party vendors
like HCLT. As per Nasscom, ER&D exports will grow to ~USD50b by 2020.
With FY15 revenues of USD1b+, HCLT is the largest provider of outsourced
Engineering Services (19% of HCLT’s revenue). Its acquisition of Geometric
further augment its capabilities and open doors in the verticals of
automotive, industrial and aerospace, thus improving prospects of
advantages in the mid-long term.
HCLT trades at 14x/12.5x FY17/F18E EPS. We expect it to post USD revenue
CAGR of 11.6% over FY16-18E and EPS at a CAGR of 9.1%, during this period. A
couple of quarters ago, we had lowered our target multiple for HCLT from 16x,
embedding:
1. Relative slackening in Engineering Services activity v/s a spike in 2HCY14
(though the segment should still grow above company average), and
2. Risks to IMS growth beyond the foreseeable future from disruption in the
market through cloud / automation / software-defined infrastructure.
We continue to believe in double digit organic growth potential at HCLT, despite
the softness in Application Services, substantiated by a strong order book. Given
better growth than peers like TECHM and WPRO, along with 25%+ RoE, we have
retained our target multiple at 15x, while having already embedded
conservatism in our margin outlook going forward.
Consequently, our price target of INR940 implies 20% upside. A pick-up in
organic growth would be the key trigger for the stock.
7
24 August 2016

HCL Technologies
Key triggers
Uptick in quarterly deal wins TCV – led by compounding of Engineering Services
deals to IMS and ITO signings
Return to industry-leading growth
Pick-up in organic revenue growth
Key risks
Lack of growth pick-up in Financial Services
Pull back in IMS growth amid competitive intensity
Continued moderation of Application Services weighing on overall growth
Exhibit 11: HCLT 1-year forward PB chart
Avg(x)
24.7
5.5
4.5
3.5
14.3
2.5
1.5
0.5
3.3
3.2
1.0
3.3
PB (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
5.2
Exhibit 10: HCLT 1 year forward PE chart
29
24
19
14
9
4
5.8
15.1
14.7
PE (x)
Median(x)
Peak(x)
Min(x)
Exhibit 12: Comparative valuations
Company
TCS
Infosys
Wipro
HCL Tech
TechM
Cognizant
Mkt cap
(USD b)
74.7
35.6
18.9
16.5
6.8
35.4
Rating
Neutral
Buy
Neutral
Buy
Neutral
Not Rated
TP (INR)
2,650
1,300
570
940
550
Upside
(%)
3.0
23.0
9.6
19.0
17.8
EPS (INR)
FY17E
FY18E
134.0
153.1
62.3
72.4
34.9
40.6
56.3
62.8
33.8
41.3
2.6
3.2
P/E (x)
FY17E
FY18E
19.2
16.8
17.0
14.6
14.9
12.8
14.0
12.6
13.8
11.3
22.4
17.9
RoE (%)
FY16-18E CAGR (%)
FY17E
FY18E
USD rev.
EPS
33.6
32.7
10.8
11.5
23.0
23.9
10.6
10.7
17.9
18.9
7.3
6.0
26.3
25.1
11.4
8.3
19.8
17.6
9.6
8.5
15.7
16.8
11.8
10.4
Source: Bloomberg, Company, MOSL
24 August 2016
8

HCL Technologies
Story in charts
Exhibit 13: Opportunity from
continues to remain healthy…
churn
in
rebid
market
Exhibit 14: … and HCLT continues to reap its benefits
through deal wins…
Deals TCV (USD b)
2
Churn market oppurtunity (USD b)
Dec 2011 estimates
Dec 2013 estimates
1
42
48
28
46
24
34
54
2017
26
2018
1
1
2
1
1
1
2
1
1
2014
2015
2016
Source: Company, MOSL
Source: Company, MOSL
Exhibit 15: IMS growth moderation could impact
future growth, remains strong for now
IMS Revenues
% of overall revenues
% of incremental revenues
68
67
54
41
16
23 21
23
30
24
29 29
34
35
41
37
Exhibit 16: Parts apart from IMS adding to incremental
growth
Incremental Revenue Contribution (%)
IMS
67.3
ER&D
67.4
36.5
21.6
8.6
FY12
FY13
9.3
FY14
FY15
LTM
22.2
64.9
30.3
15.9
29.5
21.6
FY09
FY10
FY11
FY12
FY13
FY14
FY15
LTM
FY11
Source: Company, MOSL
Source: Company, MOSL
Exhibit 17: Operating margins under pressure
EBIT margin (%)
SGA (%)
Exhibit 18: PAT growth bogged down by margin stress
PAT (INR m)
63.9
52.6
58.3
71,057
56,670
40,250
16,092
24,553
63,709
11.5
6.3
6.0
12.3
YoY growth (%)
80,064
89,901
14.8
14.0
13.3
12.3
12.3
12.7
11.7
11.7
36.8
13.4
FY11
16.0
FY12
19.7
FY13
24.1
FY14
22.3
FY15
20.5
FY16
19.8
19.8
FY11
FY12
FY13
FY14
FY15
FY17E FY18E
FY16 FY17E FY18E
Source: Company, MOSL
Source: Company, MOSL
24 August 2016
9

HCL Technologies
Operating metrics
Exhibit 1: Comparative Valuation
2QFY14 3QFY14
Service Line wise (%)
Application services
Engineering and R&D Services
Infrastructure Services
BPO Services
Vertical wise (%)
BFSI
Manufacturing
Retail & CPG
Telecom MP&E
Life Sciences
Public Services
Others
Geography wise (%)
US
Europe
ROW
Client wise (%)
Top 5 clients
Top 10 clients
Top 20 clients
QoQ Growth (%)
Service Line wise
Application services
Engineering and R&D Services
Infrastructure Services
BPO Services
Vertical wise
BFSI
Manufacturing
Retail & CPG
Telecom MP&E
Life Sciences
Public Services
Others
Geography wise
US
Europe
ROW
Client wise
Top 5 clients
Top 10 clients
Top 20 clients
45.1
16.6
33.7
4.6
25.9
33.6
8.6
8.9
10.8
9.2
3.1
56.9
31.3
11.8
14.8
23.8
33.6
44.9
16.1
34.5
4.5
26.9
33.3
8.5
8.4
10.4
10.1
2.3
55.4
31.8
12.8
15.0
24.1
34.2
4QFY14
44.2
16.2
34.5
5.1
28.4
31.6
8.5
8.9
10.2
10.1
2.3
54.3
33.0
12.7
14.7
23.7
33.7
1QFY15
43.4
17.1
34.5
5.0
28.2
32.3
9.5
8.7
9.8
9.3
2.2
56.3
32.3
11.4
14.4
23.1
33.0
2QFY15
42.4
18.3
34.4
4.9
26.6
32.9
9.7
8.4
11.1
9.5
1.8
57.4
31.7
10.9
14.0
22.3
32.4
3QFY15
41.5
18.9
34.5
5.1
26.1
33.4
8.4
9.0
11.2
10.4
1.5
57.5
31.0
11.5
13.5
21.8
32.2
4QFY15
40.9
18.7
35.3
5.2
26.0
32.7
8.8
9.5
12.0
9.7
1.3
58.6
30.4
11.0
13.2
21.7
32.4
1QFY16
40.4
19.2
35.1
5.3
26.1
32.5
8.8
9.6
12.4
10.0
0.6
58.7
31.7
9.6
13.6
21.9
32.4
2QFY16
40.4
18.6
35.5
5.5
25.9
31.5
9.5
9.7
12.2
10.6
0.6
61.0
29.9
9.1
13.6
21.7
32.4
3QFY16 1QFY17
39.9
18.7
36.2
5.2
25.0
31.4
9.2
9.9
12.8
11.1
0.5
62.5
28.4
9.1
13.6
21.8
32.2
38.3
17.7
39.8
4.1
23.6
33.2
10.0
9.1
11.9
11.7
0.5
59.9
31.4
8.7
13.9
21.8
31.7
2.4
2.1
6.0
13.7
3.8
5.0
7.5
1.2
-3.8
21.8
-16.9
3.4
7.8
-2.3
1.9
4.0
5.3
2.9
0.1
5.1
-0.7
6.8
2.0
2.8
-2.6
-0.7
13.9
-20.4
0.4
4.8
11.0
4.4
4.3
4.9
1.6
3.8
3.7
17.7
9.3
-2.1
2.9
9.5
1.4
2.8
2.1
1.3
7.4
2.2
1.3
1.6
1.8
0.0
7.6
1.9
-0.2
1.2
4.4
14.3
-0.4
-2.1
-6.1
-6.7
5.7
-0.3
-8.9
-0.2
-0.7
-0.2
1.6
11.5
3.6
2.0
-1.9
5.9
5.6
0.4
17.9
6.2
-15.8
6.0
2.1
-0.6
1.1
0.4
2.1
-2.1
3.0
0.4
4.1
-2.0
1.3
-13.4
7.1
0.8
9.3
-12.0
0.0
-2.6
7.9
-3.6
-2.3
-0.6
1.6
2.0
5.5
4.8
2.8
1.0
8.1
8.9
10.5
-3.8
-10.6
5.1
1.2
-1.3
0.9
2.7
3.8
-0.7
3.3
-0.1
2.8
0.8
-0.2
0.5
1.5
3.8
3.6
-53.6
0.6
4.8
-12.3
3.5
1.4
0.5
1.4
-1.8
2.6
5.2
0.6
-1.7
9.5
2.5
-0.2
7.5
1.4
5.4
-4.4
-3.9
1.4
0.5
1.4
0.1
1.9
3.3
-4.2
-2.2
1.0
-1.9
3.4
6.3
6.1
-15.5
3.8
-3.7
1.3
1.3
1.8
0.7
2.2
0.8
17.1
-16.0
0.6
12.6
15.8
-2.1
-1.0
12.3
6.5
2.1
17.8
1.8
8.9
6.5
4.9
Source: Company, MOSL
24 August 2016
10

HCL Technologies
Financials and Valuations
Key assumption
INR/USD Rate
Revenues (USD m)
IMS Revenue (USD m)
Software Services Rev (USD m)
Total Headcount
Net Addition
Per Capita Productivity (USD)
2011
44.9
3,545
827
2,523
77,046
12,489
46,015
2011
159,118
26.6
26,312
16.5
4,935
21,377
-541
0
20,836
4,744
22.8
0
16,092
16,092
36.7
2012
50.7
4,152
1,005
2,957
84,319
7,273
49,237
2012
210,312
32.2
39,396
18.7
5,641
33,755
-1,170
0
32,585
8,032
24.6
0
24,553
24,553
52.6
2013
54.9
4,687
1,367
3,114
85,505
1,186
54,810
2013
257,336
22.4
57,536
22.4
6,726
50,810
1,570
0
52,380
12,130
23.2
0
40,250
40,250
63.9
2014
61.4
5,360
1,820
3,293
91,691
6,186
58,454
2014
329,180
27.9
86,670
26.3
7,320
79,350
-160
0
79,190
15,480
19.5
1
63,709
63,710
58.3
2015
62.3
5,952
2,064
3,588
106,107
14,416
56,097
2015
370,620
12.6
87,020
23.5
4,440
82,580
7,559
1,551
91,690
19,080
20.8
2
72,608
71,059
11.5
2016
66.3
4,698
1,673
2,775
104,896
-1,211
59,714
2016
311,360
-16.0
68,150
21.9
4,450
63,700
7,960
0
71,660
14,990
20.9
0
56,670
56,670
-20.2
2017E
67.8
6,996
2,780
3,923
117,018
12,122
59,787
2017E
474,128
52.3
100,117
21.1
6,328
93,789
8,038
0
101,827
21,763
21.4
0
80,064
80,064
41.3
2018E
70.0
7,771
3,128
4,304
129,318
12,300
60,092
2018E
543,970
14.7
113,828
20.9
6,117
107,711
7,357
0
115,068
25,167
21.9
0
89,901
89,901
12.3
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
(INR Million)
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Intangibles
Investments
Current Assets
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Net Current Assets
Total Assets
2011
2,729
81,616
84,345
21,240
105,585
49,608
27,443
22,165
52,270
19,991
51,809
34,065
5,198
12,546
40,650
11,159
105,585
2012
2,762
104,552
107,314
19,222
126,536
57,859
33,084
24,775
69,453
19,723
75,325
53,440
6,673
15,212
62,740
12,585
126,536
2013
2,777
140,168
142,945
6,960
149,905
67,093
39,810
27,283
72,046
42,991
88,159
61,767
7,321
19,071
80,574
7,585
149,905
2014
2,793
198,021
200,814
7,509
208,323
78,595
47,130
31,465
74,954
89,948
108,537
77,086
10,206
21,245
96,581
11,956
208,323
2015
2,797
244,713
247,510
4,690
252,200
89,770
51,570
38,200
82,700
104,450
131,760
94,860
13,520
23,380
104,910
26,850
252,200
2016
2,799
277,422
280,221
9,732
289,953
99,251
56,020
43,231
102,983
112,837
138,624
107,228
7,293
24,103
107,720
30,904
289,955
(INR Million)
2017E
2,802
326,927
329,729
7,918
337,647
128,204
56,020
72,184
105,664
111,102
198,987
121,758
50,098
27,131
150,290
48,697
337,647
2018E
2,806
384,623
387,428
7,918
395,346
136,088
56,020
80,067
111,443
105,322
271,874
139,694
101,323
30,856
173,360
98,514
395,346
24 August 2016
11

HCL Technologies
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2011
11.5
15.1
61.8
3.8
32.6
2012
17.5
21.6
77.7
6.0
34.3
2013
28.6
33.3
103.0
6.0
21.0
2014
45.1
50.3
143.8
11.0
24.4
2015
50.4
54.5
177.0
16.0
31.8
2016
40.1
43.3
200.2
17.0
42.4
2017E
56.3
60.4
235.3
18.0
32.0
2018E
62.8
67.0
276.2
19.0
30.3
0.0
0.0
0.0
0.0
0.0
0.0
20.8
15.4
19.8
7.8
74.0
0.2
44.9
36.4
10.1
5.1
27.4
0.8
25.6
20.6
25.3
9.0
75.9
0.1
27.5
23.6
7.6
4.1
18.2
0.8
32.2
26.5
34.2
9.9
81.7
0.0
17.4
15.6
5.5
3.1
11.6
1.4
37.1
35.3
53.8
11.2
77.0
0.0
15.6
14.4
4.4
2.7
11.3
2.0
31.7
29.2
48.3
10.6
84.7
0.0
19.6
18.2
3.9
2.4
10.9
2.2
21.5
19.9
30.6
7.6
118.5
0.0
14.0
13.0
3.3
2.0
9.5
2.3
26.3
24.1
39.0
8.2
88.1
-0.1
12.5
11.7
2.8
1.7
7.9
2.4
25.1
23.3
41.3
7.1
87.7
-0.2
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
2011
26,312
-752
-4,836
-4,744
0
15,980
-7,370
8,610
-50
0
-7,420
3,885
-5,392
-6,541
-8,048
512
4,686
5,198
2012
39,396
-9,657
-6,410
-8,032
0
15,297
-15,777
-480
6,727
0
-9,050
8,118
-2,018
-10,871
-4,772
1,475
5,198
6,673
2013
57,536
-2,415
3,843
-12,130
0
46,834
-9,412
37,422
-21,463
0
-30,875
5,134
-12,262
-8,183
-15,311
648
6,673
7,321
2014
86,670
-999
-950
-15,480
0
69,241
-13,412
55,829
-47,493
0
-60,905
12,155
549
-18,156
-5,452
2,884
7,321
10,206
2015
87,020
-7,200
-9,555
-19,080
0
51,185
-10,172
41,013
-16,527
0
-26,699
1,040
-2,819
-19,393
-21,171
3,315
10,206
13,520
2016
68,150
-8,129
-10,326
-14,990
0
34,705
-21,635
13,070
-8,342
0
-29,977
4,764
5,042
-20,763
-10,958
-6,230
13,520
7,291
(INR Million)
2017E
100,117
-3,299
17,941
-21,763
0
92,997
-34,663
58,334
8,806
0
-25,857
-91
-1,814
-22,427
-24,332
42,808
7,291
50,099
2018E
113,828
-5,779
-1,298
-25,167
0
81,583
-14,000
67,583
8,486
0
-5,514
-7
0
-24,837
-24,844
51,225
50,099
101,324
24 August 2016
12

HCL Technologies
NOTES
24 August 2016
13

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14