Hexaware Tech has target of Rs 85: Parmar

Hexaware Technologies has target of Rs 85, says Ajay Parmar, Head-Institutional Research, Emkay Global Financial Services Ltd.

Parmar told CNBC-TV18, "Hexaware Technologies is a mid sized IT company; they are more into People soft implementation, business analytics, testing and other services. Almost 67% of their business is in US, 27% in Europe. Almost 37% is coming from BFSI, 22% is coming from travel and transport. The last three quarters, there is traction in the quarterly numbers. This quarter also we see 11% growth in QoQ in PAT terms."

He further added, "If you look at our numbers for the next two years, we are estimating 25% growth in sales. We are expecting 50% growth in EBITDA. We are expecting a 500 bps rise in EBITDA margins. On the top of it we expect PAT to go up to 50% CAGR with an incremental tax slab from 10-22% that is the rise in the effective tax rate; even then the company is posting 50% of PAT."

"This company has out performed the market in the last one year. On relative terms this stock has out performed 92% in the last one year against Nifty. It is available at 12 times. We target at least Rs 85 in the next 6 months, so almost 15-20% returns in the next 6 months."

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