Stock Review: HCL TECH

HCL Tech's profit growth lagged behind its topline growth in the past few quarters on account of higher forex hedging losses and its bleeding business outsourcing (BPO) operations. The company has reduced its loss-making forex exposure to negligible levels. It has also chalked out a revival strategy for the BPO segment. These two factors would help in improving its profits and profitability in future. The company's topline is expected to grow at a faster clip than most other top IT companies, given its synergies with Axon, its European subsidiary. The stock trades at nearly 19 times its FY11 estimated P/E, which is relatively cheaper.