Hexaware Technologies - Q3FY12 Result Update - Emkay

Reco: ACCUMULATE
CMP: Rs 97
Target Price: Rs 110

Blockbuster show, retain ACCUMULATE

- Dec'11 show vindicates positive thesis.Rev at US$ 84.1 mn (+6.7% QoQ) beat exp (ahead of guidance of US$ 82-82.5 mn) with mgns improving by ~430 bps QoQ to 23%

- Strong op performance coupled with lower taxes drove handsome beat on profits (Rs 881 mn, +36% QoQ, Emkay est Rs 673 mn). Op metrics performance remains decent

- Co's CY12 revenue guidance encouraging at 'atleast 20% YoY growth at US$ 370 mn. March'12 revenue guidance of US$ 87.5 mn (+4% QoQ) , better than Tier I peers

- We tweak US$ rev estimates higher which drives a 6.6%/9% raise in CY12/13E EPS to Rs 10.3/11. Valuations attractive for ~5% dividend yield at<10x P/E. ACCUMULATE, TP Rs 110.

Source : Equity Bulls

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