HCL Technologies hosted its investor meet at New York on December 8 to discuss the company’s strategy, outlook and future growth. HCL Tech maintained its FY23 constant currency revenue guidance of 13.5 ‐14.5 per cent, services guidance of 16‐17 per cent and EBIT margin guidance of 18‐19 per cent for FY23, but expects to be at the lower end of the revenue guidance.

The company noted some slowdown in the near term driven by higher than expected furloughs in the BFSI (20.6 per cent of revenues) and technology (15.1 per cent of revenues) as well as reduced discretionary spends within pockets of telecom and tech.

Management also highlighted several levers which should continue to drive margin improvement. The company continues to return cash to shareholders and expects to maintain a payout ratio of 75 per cent of net income between FY22‐26.

The company expects to continue to return cash to shareholders. 88 per cent of net income generated was returned to shareholders in FY22 and dividend yield for FY23 is expected to be 4.1 per cent based on current CMP.

Centrum maintains Add rating on the stock, tweaks FY23 revenue forecasts slightly downwards by 0.3 per cent and ,maintains forecasts for FY24E/FY25 leaving the target price unchanged.

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