Views on Hexaware 4QCY2013 results - Angel Broking

Views of Ms. Ankita Somani (Research Analyst - IT, Angel Broking) on Hexaware 4QCY2013 results:

"For 4QCY2013, Hexaware reported broadly in-line set of results on the revenue as well as profit but disappointed marginally on the operating margin front. The USD revenue came in at US$100mn, up 1.3% qoq. In INR terms, revenue came in at Rs. 620cr, almost flat on sequential basis. Revenue growth during the quarter was hit because of 6.5% qoq decline in revenues from its top client. The company's EBITDA margin declined by ~130bp qoq to 22.5% on account of 25% qoq rise in SG&A expenses. PAT came in at Rs. 103cr, up 4.5% qoq. The revenue growth during the quarter was broad based and the company added 10 new clients.

With a new owner coming in, (Barings Private Equity Asia acquired ~42% stake in the company in October - 27.7% stake from the erstwhile promoters and 14.1% stake from General Atlantic), Hexaware has stopped giving out quarterly revenue guidance as well as bill rates. We remain keen to watch out company's strategy post the promoter change and operating performance for couple of quarters. Moreover, management indicated healthy traction in key verticals namely BFSI and healthcare & insurance along with healthy demand in North America and Europe. We recommend Neutral rating on the stock."

Source : Equity Bulls

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