Hexaware Q1 PAT likely to fall 9% QoQ at Rs 80 cr

Software services provider Hexaware Technologies is expected to report degrowth of 9.1% quarter-on-quarter in its profit after tax of Rs 80 crore in the first quarter of calendar year 2012, according to CNBC-TV18 poll. Profit in the October-December quarter 2011 stood at Rs 88 crore.

EBITDA too is seen falling at Rs 98 crore from Rs 99.4 crore quarter-on-quarter and EBITDA margin is likely to be at 22.3% versus 23%.

However, revenues are expected to up by 1.87% to Rs 440 crore in the January-March quarter 2012 from Rs 431.9 crore in the previous quarter.

In dollar terms, revenues are seen going up by 4.4% to USD 87.8 million versus USD 84.1 million during the same period. (Company had given guidance of USD 87.5 million, up 4%)
 
Analysts feel the guidance for the second quarter will be critical. 

Q4 expectations

Dollar revenues beat on guidance despite cross currency headwinds (Tier 1 HCL and TCS at around 2.5%)

Margin slightly lower by 70 bps due to rupee appreciation.
**Margins had improved by 930 basis points to 18.2% in CY11 on reduction in SG&A, increase in offshoring and higher utilization 

There are at least two levers that management targets.
**Improve the proportion of entry level hires in the total to 45% in 2012 from 33% in 2011 – reduce wage cost .
**Proportion of offshore revenue is low versus peers (42% in the Dec-11 quarter versus 55% for TCS and 51% for Infosys)
**Utilization had contributed to margin improvement but unlikely to do so anymore due to higher fresher addition

Forex loss to be present this quarter as well