Nomura Financial Advisory and Securities has maintained 'Buy' on HCL Technologies with revised target price of Rs 1,030 as against current market price (CMP) of Rs 980 in its report.

HCL Technologies (HCLT) has around 40% of revenues in non-USD currencies, so this effectively means around 7% appreciation of USD versus those currencies. While the cross currency impact is slightly ahead of our calculation of 230bps, we do not see this as a material incremental negative. Cross currency will impact USD revenue growth at all companies in the sector in the current quarter and we estimate tier-1 IT companies will see a 200-300bps likely impact.

Commenting on the investment rationale, Nomura said, ''We believe HCL Technologies's strong fundamentals and growth comfort should outweigh the margin cautiousness and we would look to add on dips. We continue to expect HCLT to grow better than Tier-1 IT peers at 3.5% q-q in constant currency terms in 3QF vs ~2.5% q-q at peers like TCS/INFO/WPRO.

We also have a high degree of comfort on HCLT being among the faster growing companies within tier-1 IT by virtue of stronger positioning and higher contribution from faster growing service lines for the industry with ~58% of revenues coming from IMS, BPO and Engineering services and cheaper than peer group valuation at 14-15x P/E on FY17F.''

Shares of the company declined Rs 40.15, or 4.1%, to settle at Rs 939.50. The total volume of shares traded was 278,002 at the BSE (Wednesday).

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