Hexaware Technologies Ltd

Strengths & Weaknesses

Strengths

Growing Brand Value: According to Brand Finance, the world’s leading independent brand valuation firm, Hexaware's brand valuation increased by 66% from FY20 to FY23.

Wide Range of Services Offered: Hexaware provides services like Application Transformation Management, Enterprise Solutions, Digital Assurance, Business Process Services (BPS), Infrastructure Management Services, Digital & Analytics, etc.

High Operating Margin: The company has high operating margin, driven by higher revenue from offshore or nearshore delivery, which is more profitable than onsite delivery revenue.

IPO News: Carlyle has brought together Kotak Mahindra Capital, Citi, and JP Morgan, alongside IIFL Capital and HSBC Securities, as it prepares its portfolio company, Hexaware Technologies, for an IPO. The aim is to raise approximately $1 billion (₹8,350 Cr) through the offering, targeting a valuation ranging between $5 billion and $6 billion (₹41,750 Cr to ₹50,100 Cr).

Weaknesses

Employee Turnover: Hexaware suffers from a high employee turnover ratio, which makes it expensive to maintain current employees or recruit new ones.

Increasing costs: The company is incurring more costs to build a strong new supply chain and logistics network. This new network will be expensive as it will compete with the upcoming AI models.

Balance Sheet	FY23	FY22	FY21	FY20	FY19
Equity Share Capital	60.7	60.4	60.3	60.1	59.7
Other Equity	4,574.5	4,062.6	3,727.8	3,175.8	2,705.8
Total Equity	4,635.2	4,123.0	3,788.1	3,235.8	2,765.5
Borrowings (secured)	0	0	0	146.1	142.9
Other NC Liabilities	411.1	436.3	431.9	500.3	47.3
Total NC liabilities	411.1	436.3	431.9	646.4	190.3
Borrowings (secured)	0	82.7	0	43.8	0.1
Other Current Liabilities	2,156.5	1,869.6	1,453.9	1,211.6	1,212.9
Total Current liabilities	2,156.5	1,952.3	1,453.9	1,255.5	1,213.0
Total Equity & Liabilities	7,202.8	6,511.6	5,673.9	5,137.7	4,168.7
Fixed Assets (incl. WIP)	2,508.7	2,593.8	2,403.3	2,488.1	2,123.9
Other Non Current Assets	477.5	438.2	322.8	336.3	319.7
Total NC Assets	2,986.2	3,032.0	2,726.1	2,824.3	2,443.5
Trade Receivables	1,386.3	1,384.6	1,019.3	814.0	979.6
Cash & cash equivalents	1,773.4	1,291.6	1,178.7	1,011.4	231.6
Other Current assets	1,056.9	803.4	749.7	487.9	514.0
Total Current Assets	4,216.6	3,479.6	2,947.8	2,313.4	1,725.2
Total Assets	7,202.8	6,511.6	5,673.9	5,137.7	4,168.7

Profit & Loss	FY23	FY22	FY21	FY20	FY19
Revenue from operations	10,380.3	9,199.6	7,177.7	6,262.1	5,582.5
Growth %	12.83%	28.17%	14.62%	12.17%	0
Operating Expense	8,799.2	7,977.9	6,044.7	5,215.2	4,704.3
Growth %	10.29%	31.98%	15.11%	11.63%	0
Operating Profit	1,581.1	1,221.7	1,132.9	1,046.8	878.2
Operating Profit Margin %	15.23%	13.28%	15.78%	16.14%	15.73%
Other Income	8.8	179.2	66.8	35.2	11.8
Finance costs	37.8	33.5	34.4	49.2	7.4
Depreciation and amortization expense	283.6	244.4	224.2	232.4	103.4
Profit before Tax	1268.5	1123.0	941.2	800.4	779.3
Tax expense	270.9	238.8	192.4	179.0	137.9
Tax %	21.36%	21.26%	21.78%	24.28%	17.76%
Profit after Tax	997.6	884.2	748.8	621.5	641.3
Growth %	12.83%	27.96%	23.82%	-12.59%	0
PAT%	9.61%	9.61%	10.43%	9.92%	11.49%
EPS	16.4	14.55	12.3	10.25	10.6

Shareholding Pattern

Color	Shareholder	Holding
	CA Magnum Holdings (Parent Company of Hexaware Technologies Limited)	95.54%
	Others	4.46%

Fundamentals

Quick Insights

Market Leadership: Hexaware has strong market position in the software and programming industry.

Market Cap₹40,049.96 Cr

PE Ratio40.24

EPS₹16.4

Dividend Yield-

Book Value₹76.39 Cr

Debt/Equity-

Price/Book8.64

Price/Sales-

Industry PE-

Sales₹10,380.3 Cr

Profit After Tax₹997.6 Cr

Share Capital₹60.7 Cr

Shares Outstanding-

ISININE093A01041

SectorIT Services

Symbol-

About Company

Hexaware Technologies, an IT services company backed by the Carlyle Group. The company offers various services regarding applications, cybersecurity, generative AI, sustainability, etc. Hexaware has won numerous awards with CEO R Srikrishna Recognized at the Asian Business Leaders Conclave by The Economic Times. They have also recently acquired Softcrylic, a Minneapolis based data consulting firm.

Quick Insights

Market Leadership: Hexaware has strong market position in the software and programming industry.

Market Cap₹40,049.96 Cr

PE Ratio40.24

EPS₹16.4

Dividend Yield-

Book Value₹76.39 Cr

Debt/Equity-

Price/Book8.64

Price/Sales-

Industry PE-

Sales₹10,380.3 Cr

Profit After Tax₹997.6 Cr

Share Capital₹60.7 Cr

Shares Outstanding-

ISININE093A01041

SectorIT Services

Symbol-

About Company

Strengths

Growing Brand Value: According to Brand Finance, the world’s leading independent brand valuation firm, Hexaware's brand valuation increased by 66% from FY20 to FY23.

High Operating Margin: The company has high operating margin, driven by higher revenue from offshore or nearshore delivery, which is more profitable than onsite delivery revenue.

Weaknesses

Employee Turnover: Hexaware suffers from a high employee turnover ratio, which makes it expensive to maintain current employees or recruit new ones.

Increasing costs: The company is incurring more costs to build a strong new supply chain and logistics network. This new network will be expensive as it will compete with the upcoming AI models.

Annual Reports

FY 2019 FY 2020 FY 2021 FY 2022 FY 2023

Balance Sheet	FY23	FY22	FY21	FY20	FY19
Equity Share Capital	60.7	60.4	60.3	60.1	59.7
Other Equity	4,574.5	4,062.6	3,727.8	3,175.8	2,705.8
Total Equity	4,635.2	4,123.0	3,788.1	3,235.8	2,765.5
Borrowings (secured)	0	0	0	146.1	142.9
Other NC Liabilities	411.1	436.3	431.9	500.3	47.3
Total NC liabilities	411.1	436.3	431.9	646.4	190.3
Borrowings (secured)	0	82.7	0	43.8	0.1
Other Current Liabilities	2,156.5	1,869.6	1,453.9	1,211.6	1,212.9
Total Current liabilities	2,156.5	1,952.3	1,453.9	1,255.5	1,213.0
Total Equity & Liabilities	7,202.8	6,511.6	5,673.9	5,137.7	4,168.7
Fixed Assets (incl. WIP)	2,508.7	2,593.8	2,403.3	2,488.1	2,123.9
Other Non Current Assets	477.5	438.2	322.8	336.3	319.7
Total NC Assets	2,986.2	3,032.0	2,726.1	2,824.3	2,443.5
Trade Receivables	1,386.3	1,384.6	1,019.3	814.0	979.6
Cash & cash equivalents	1,773.4	1,291.6	1,178.7	1,011.4	231.6
Other Current assets	1,056.9	803.4	749.7	487.9	514.0
Total Current Assets	4,216.6	3,479.6	2,947.8	2,313.4	1,725.2
Total Assets	7,202.8	6,511.6	5,673.9	5,137.7	4,168.7

Profit & Loss	FY23	FY22	FY21	FY20	FY19
Revenue from operations	10,380.3	9,199.6	7,177.7	6,262.1	5,582.5
Growth %	12.83%	28.17%	14.62%	12.17%	0
Operating Expense	8,799.2	7,977.9	6,044.7	5,215.2	4,704.3
Growth %	10.29%	31.98%	15.11%	11.63%	0
Operating Profit	1,581.1	1,221.7	1,132.9	1,046.8	878.2
Operating Profit Margin %	15.23%	13.28%	15.78%	16.14%	15.73%
Other Income	8.8	179.2	66.8	35.2	11.8
Finance costs	37.8	33.5	34.4	49.2	7.4
Depreciation and amortization expense	283.6	244.4	224.2	232.4	103.4
Profit before Tax	1268.5	1123.0	941.2	800.4	779.3
Tax expense	270.9	238.8	192.4	179.0	137.9
Tax %	21.36%	21.26%	21.78%	24.28%	17.76%
Profit after Tax	997.6	884.2	748.8	621.5	641.3
Growth %	12.83%	27.96%	23.82%	-12.59%	0
PAT%	9.61%	9.61%	10.43%	9.92%	11.49%
EPS	16.4	14.55	12.3	10.25	10.6

Shareholding Pattern

Color	Shareholder	Holding
	CA Magnum Holdings (Parent Company of Hexaware Technologies Limited)	95.54%
	Others	4.46%

Board of Directors

Michael W. BenderNon Executive Chairman

R SrikrishnaCEO & Executive Director

Sandra HorbachDirector

Julius GenachowskiDirector

Lucia SoaresDirector

Neeraj BharadwajDirector

Kapil ModiDirector

Shawn DevillaDirector

Milind SarwateIndependent Director

Joseph McLaren QuinlanIndependent Director

Senior Management

R SrikrishnaCEO&ED

Vinod ChandranCOO

Vikash Kumar JainCFO

Nidhi AlexanderCMO

Nita NambiarCPO

Uma ThomasCRO

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