Hexaware cuts guidance, shares tumble 4%

Moneycontrol Bureau

Hexaware Technologies has cut its fourth quarter and full year 2012 guidance citing changes to a project plan for a customer and impact on account of hurricane Sandy, which devastated the US east coast last month. The announcement sent the software service provider's shares down 4 percent in morning trade.

"Due to certain unforeseen changes to a project plan in a large engagement for a customer, Hexaware now expects the revenues for Q4 to be USD 92 million at the same exchange rates as provided earlier (USD 1 = Rs 53.81). The revised revenue guidance also includes impact of USD 450 thousand on account of hurricane Sandy on the eastern coast of the United States of America," the company said on Friday.

Due to the revision in revenue outlook and continued investments made by Hexaware keeping the medium term horizon in mind, there will a adverse impact on profit margins this quarter, it added.

Hexaware will report results for the fourth quarter (Oct-Dec) and full year 2012 in early February.

"The relationship with the client remains solid. All other projects and initiatives with the client continue unchanged and on track. The company remains on course to deliver above industry revenue growth over the medium term," PR Chandrasekar, CEO and vice chairman, clarified.

Earlier this week, Cognizant Technology Solutions shook the IT industry when in a filing to the SEC it said its top executives will receive 100 percent of their performance-linked shares if the company achieves revenue of USD8.5 billion next year. However, it would translate into a growth of only 16 percent, lower than its expected growth of 20 percent this year.

However, the company later clarified that its proposal of granting performance linked stock options to senior executives was not necessarily an indicator of its growth guidance.

Industry body NASSCOM (National Association of Software and Services Companies) last month said the Indian IT services industry is expected to meet the lower end of its earlier 11-14 percent growth guidance for FY2013, citing uncertainty, turmoil and less visibility in the global environment.

"We embedded the fact that we have about 20 percent of our business that comes from what we call Global In-house Centers (GICs). In many of those corporations, there has been a worldwide freeze. Infact we were probably expecting a lower growth rate, sub-10 percent growth rate in the GICs, which is bringing it down," Som Mittal, President, NASSCOM, had said. 

At 9:45 hrs, Hexaware shares were down 4 percent at Rs 102.25 on NSE.

Nachiket Kelkar
nachiket.kelkar@network18online.com