MOTILAL OSWAL INITIATES BUY ON HEXAWARE TECHNOLOGIES, TARGETS RS 570
Motilal Oswal Maintains BUY Rating on Hexaware Technologies
Hexaware Technologies (HEXT) has reported revenue of USD389m in 1QCY26, marking a decline of 0.3% quarter-over-quarter (QoQ) in constant currency (CC) terms, which is lower than Motilal Oswal's estimate of 0.5% QoQ CC.
The company's revenue growth was driven by the Healthcare & Insurance segment, which increased by 10.1% QoQ in USD terms, while the Professional services segment saw a growth of 1.0% QoQ. However, the Travel and Transportation segment declined by 8.6% QoQ, while the Banking segment saw a decline of 7.9% QoQ.
Despite the mixed revenue growth, Hexaware Technologies' adjusted earnings before interest and taxes (EBIT) margin stood at 13.3%, which is higher than Motilal Oswal's estimate of 11.9%. The company's adjusted profit after tax (PAT) declined by 5.8% QoQ and 0.6% year-over-year (YoY) to INR3.2b, which is lower than the research firm's estimate of INR3.1b.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Revenue Growth Comparison
| Segment | 1QCY26 Revenue Growth (QoQ) |
|---|---|
| Healthcare & Insurance | 10.1% |
| Professional Services | 1.0% |
| Travel and Transportation | -8.6% |
| Banking | -7.9% |
Motilal Oswal has largely maintained its estimates and reiterated its BUY rating on Hexaware Technologies with a target price (TP) of INR570, based on 20x calendar year 2027 (CY27E) earnings per share (EPS). This implies approximately 24% upside.
Investor Takeaway
Motilal Oswal maintains a BUY rating on Hexaware Technologies with a target price of INR570.
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