1
Please refer to important disclosures at the end of this report
1
1
Hexaware Technologies Limited is a provider of information technology (IT),
business process outsourcing (BPO) and consulting services. Hexaware’s
revenue growth has outperformed that of peers on an organic basis, led by
its ‘Shrink IT, GrowDigital’ strategy, which makes up for 80% of its work.
Apart from its positioning, it has been able to stand on the winning side of a
large number of deals because of its focus on customers that are beyond the
top 50/100 of larger peers. It is targeting enterprises with revenue
of<USD10b, wherein deal sizes range from USD10-25m. Hexaware expects
a 10x decline in cost of operations over the next five years. The company is
targeting to add steam to its growth engine by establishing two services lines
every year which can grow at 40%+YoY. It is confident that IMS and BPS will
continue to be high growth services for FY18/19E. Hexaware has maintained
its growth guidance of 14-15%, which will make it grow faster than industry
in the current year.It has also maintain healthy cashflow of Rs 285cr+ in last
3 years. The company has reported healthy return on equity (ROE) ROE of
27.16% consistently over last 3 years and has been maintaining a healthy
dividend payout of 62.89%.The company has a RoE 27.42% and is trading
at a valuation P/E of 16.35x of FY 17 TTM earnings. Hence BUY.
BUY
CMP `254
0.9
Reuters Code
HEXT.NS
HEXW:IN
2
BSE Sensex
31,531
Nifty
9,820
Face Value (`)
IT
Market Cap (` cr)
7,673
52 Week High / Low
267.5/178.1
Avg. Daily Volume
72,605
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Hexaware Technologies Ltd
Others | IT
August 11, 2017
2
Hexaware Technologies Ltd | IT
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Hexaware
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)