Buy Hexaware Technologies; target of Rs 570: Emkay Global Financial

buy

Emkay Global Financial' research report on Hexaware Technologies

We interacted with R Srikrishna, CEO of Hexaware Technologies (HEXT), to gauge the market pulse and assess the growth outlook. KTAs: 1) HEXT’s CY25 growth was impacted by weak macros, higher than usual client-specific challenges, and weak NN deal-wins in H1CY25. NN trends and overall growth started improving in H2CY25. 2) The management has not built in any improvement in CY26 macro conditions, but believes client-specific issues will start receding from coming quarter. 3) HEXT has rolled out a ‘Zero License’ offering, which leverages agentic AI to automate high-volume, repeatable workflows previously handled by multiple low-value SaaS tools; this helps reduce license spend, simplify application stack, lower TCO, and boost RoI for enterprises. 4) It expects a deflationary impact from AI, at ~1-2% in CY26. 5) HEXT is expected to fare better in CY26 vs CY25, supported by strong deal-wins in H2CY25 and a healthy deal pipeline, steady deal ramp-ups, and benefits accruing from the revamped hunting team in CY26, with guidance factoring in the deflation impact and known clients’ specific challenges.

Outlook

We believe revenue growth acceleration and delivery against the stated guidance remain key for any stock rerating. We retain BUY on HEXT and TP of Rs570 at 20x Mar-27E EPS.

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Hexaware Technologies - 1103026 - emkay