From HCL Q2 ppt, values in million dollars
The reduction in P&P Invested Capital over a period is mainly because of Amortization + some help from rupee depreciation. HCL tech bought product business from IBM in Q3 FY 19 for 1.8 billion USD. It will be interesting to guestimate what will ROIC after 5 years. This can become key part of my investment thesis
As per management in Q2, first time they won large P&P deal because of synergy as they were vendors for IT services with same client. I feel similar sort of synergy is possible between traditional IT services and ER&D business. That is why I prefer Traditional Services + Er&D player rather than niche ER&D player
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