Q3 recovery, decent valuations to support HCL Tech's stock

The stock has been underperforming peers over the past couple of months

HCL Technologies has been the worst performer among Tier-1 IT companies over the past two months, declining about 13 per cent from its September high on weak second quarter (Q2) results and guidance cut for the products and platforms segment.

However, the stock has recovered since hitting its low last week (up 7 per cent) after brokerages upgraded it on the back of improved outlook in the services business and attractive valuations.

Analysts at Kotak Institutional Equities, who recently upgraded the stock, believe deal wins that have picked up over the last three quarters will translate into growth. Further, a diversified profile