Hold Hexaware Technologies; target of Rs 300: Edelweiss

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26 Aug, 2025 12:21

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Edelweiss' research report on Hexaware Technologies

USD revenue grew 0.9% despite partial impact of revenue loss from top clients. Excluding impact of ramp down in 2 top-5 clients, growth was broad based led by IMS (up 3.4% QoQ), BPS (2.5%), Healthcare & Insurance (7.4%) and APAC geography (20.0%). While Q3CY17 will bear full impact of ramp down in 2 top clients, management is confident of close to double digit YoY growth, leading to CY17 growth at upper-end of guidance.

Outlook

Along with superior growth than peers anchored by enhanced service offerings, Hexaware also demonstrated strong operational efficiencies, leading to margin expansion despite headwinds. We estimate revenue/EPS CAGR of 12.2%/15.5% over CY16-19 and accordingly revise up target multiple to 14x. However, at CMP, the stock is fairly valued, leaving limited upside. We maintain ‘HOLD/SP’ with revised TP of INR 300 (INR 227 earlier) as we revise up margin estimate and roll forward to CY19 estimates.

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