Emkay Global Maintains Buy Rating on Hexaware Technologies, Targets Rs 570

Hexaware Technologies CY26 Growth Outlook

Hexaware Technologies (HEXT) has reported a mixed CY25 growth performance, impacted by weak macros, higher client-specific challenges, and weak Net New (NN) deal-wins in H1CY25. However, the company's NN trends and overall growth started improving in H2CY25.

Key Factors Affecting Growth

The management has not factored in any improvement in CY26 macro conditions but believes client-specific issues will start receding from the coming quarter. Additionally, HEXT has rolled out a 'Zero License' offering, leveraging agentic AI to automate high-volume, repeatable workflows, reducing license spend, simplifying the application stack, lowering Total Cost of Ownership (TCO), and boosting Return on Investment (RoI) for enterprises.

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CY26 Growth Projections

HEXT expects a deflationary impact from AI of approximately 1-2% in CY26. The company is expected to fare better in CY26 compared to CY25, supported by strong deal-wins in H2CY25, a healthy deal pipeline, steady deal ramp-ups, and benefits accruing from the revamped hunting team in CY26.

Recommendation

We believe revenue growth acceleration and delivery against the stated guidance remain crucial for any stock rerating. As a result, we retain a BUY recommendation on HEXT with a Target Price (TP) of Rs570 at 20x Mar-27E EPS.

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