HCL Tech share price: Use market weakness to buy HCL Tech: Chakri Lokapriya
What you are expecting from HUL in the quarter by way of volume growth and other key parameters?
They have a volume growth of about 8-10% which will translate to 14-15% revenue growth. But their ad expenses, operating expenses and raw materials costs are likely to move higher. I doubt whether they have that level of pricing power, so their margins will get hit as a result.
Do you believe that we could see some sort of an uptick in Bajaj Auto’s overall volume growth? What is it that you are pencilling in for Bajaj Auto’s performance vis-à-vis its peers?
Their export number volumes will look good. Overall, they will have to face cost price pressures. But given that their capacity utilisation is still quite low, the operating leverage is unlikely to pan out in this quarter. Against that backdrop, I think it should be in line with expectations but not above expectations.
Where you are looking at opportunity within the entire IT basket? This space has been quite a leader of late.
The IT basket has done well and it will continue to do well. HCL Technologies results were just a marginal blip. The revenue was slightly behind expectations. The margins were largely as expected. It is actually a good sign both for the company and its employees because it indicates an underlying healthy demand in the industry. Its order book is phenomenally strong. HCL Technologies is a stock to buy in the current weakness because the outlook for the industry and for the company is strong.
What is your take on the entire AGR issue and how is it going to affect the telecom sector?
This is an unfortunate stance which has continued for more than two or three years. It continues to put a lid on the prospects because you are uncertain about past payments and how your future cash flows would look like. The uncertainty over past dues is not going away anytime soon. It is not a sector with a huge pricing (power), the only thing is volume growth and 5G. In the meanwhile, stay on the sidelines from both the companies in the space.
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