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Last Updated : Apr 24, 2019 09:56 PM IST | Source: Moneycontrol.com

As revenue from BFS falls, Hexaware expects other verticals to drive growth

The BFS segment accounts for about 40.8 percent of total revenue. In the quarter ended March 31, earnings from BFS dropped 2.11 percent sequentially to Rs 516.2 crore.

Swathi Moorthy @kpswathi

As revenue from banking and financial services (BFS) falls, verticals such as healthcare, insurance, manufacturing and consumer (M&C) will drive Hexaware Technologies' growth, said R Srikrishna, CEO.

Speaking to Moneycontrol, Srikrishna, who is also Executive Director, said that while the company expects a softer growth in BFS, Hexaware's other verticals healthcare and insurance (H&I), manufacturing and consumer (M&C) and professional services (PS) will clock faster revenues than the company average this year.

The company has given a revenue guidance of 12-14 percent for the current year. Hexaware's fiscal year is the calendar year.

Srikrishna said, “We expect BFS will do worse than planned at the beginning of the year.” He explained that every year in BFS many clients in January take a wait-and-watch approach, which improves through the course of the quarter. Though the clients took similar approach this year, the magnitude was a little higher than usual and it has not gone back to normal.

“There is clearly some uncertainty around macros,” he said.

Srikrishna pointed out that though there is no data supporting that macro will be weak, and there are indications of strong job and GDP growth, people think that things will slow down. “I think that is guiding it. Because of this uncertainty people are holding on to their purses,” he added.

The BFS segment accounts for about 40.8 percent of total revenue. In the quarter ended March 31, earnings from BFS dropped 2.11 percent sequentially to Rs 516.2 crore.

However, other segments such as manufacturing and consumer services is growing faster for the company. It grew 14 percent sequentially and 37.6 percent year-on-year. Healthcare and insurance contributed 18.3 percent, professional services at 14.3 percent and travel and transportation at 9.5 percent.

H&I, M&C and PS combined account for about 49.8 percent of overall revenue.

Though the hiring has improved, the attrition at the end of March 2019 stood at 18.2 percent. Srikrishna said, “Attrition is going up slowly in the last few quarters. We don’t like it but it is the trend in the industry.”

He pointed out that hiring has gone up for everyone and few companies have reported 3X growth last year. “We are in the place where everyone is hiring and it will cool off a little bit,” he added.

To contain attrition, the company has put in place initiatives apart from wage hikes. Srikrishna said, “Obviously there are wage hikes but improvement in employee experience is will be an important detriment in retaining them.”

The company has launched a programme to help managers become better leaders. It also launched a new learning platform to provide better learning opportunities for employees and motivate them to stay.
First Published on Apr 24, 2019 09:55 pm
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