Hexaware will look to maximise bookings this quarter: Hexaware Chief

Neha Alawadhi

Moneycontrol News

Hexaware Technologies is confident of meeting the upper end of its revenue forecast for the fiscal year, even as the company looks at maximising bookings in the current quarter.

“Usually Q4 is a soft quarter for revenue and profits, but it is also the quarter for bookings, where companies sign contracts and bookings for the coming year so they can realise the value in the coming fiscal. We will be looking at maximising our bookings this quarter,” R Srikrishna, CEO, Hexaware Technologies told Moneycontrol in a telephonic interaction.

Hexaware follows the January-December fiscal.

The December quarter is usually a muted one for most IT players because of the long holiday season that results in fewer working days at client sites.

Hexaware on Wednesday reported a 24.4 percent rise in consolidated net profit to Rs 142.3 crore for the quarter ended September 30, 2017, up from a net profit of Rs 114.4 crore in the same period a year ago.

Revenue rose 1 percent from last quarter, and 9.8 percent to Rs 993.1 crore from the same period a year ago.

Srikrishna said the results were better than what the company had expected, given some client specific issues that had been flagged in the previous quarter.

He had said in the July quarter results call that the loss of a portion of work from a client “will have partial impact in Q3 and full impact in Q4”. Another client had decided to insource their work.

Banking and financial services grew 1 percent during the quarter and 18.7 percent since last year.

Srikrishna said Hexaware sees an opportunity in the BFS vertical as clients look for reduction in IT and BPO spends.

“The BFSI vertical is expected to revive going ahead, with a slow ramp-up in third quarter,” said Apurva Prasad and Amit Chandra of HDFC Securities Institutional Research, in a note.

Analysts also said they expect the company to maintain its growth momentum in the December quarter.

“Along with superior growth than peers anchored by enhanced service offerings, Hexaware also demonstrated strong operational efficiencies, leading to margin expansion despite headwinds,” said Sandip Agarwal of Edelweiss Research.

In the near-term, HDFC Securities expects revenue growth to remain flat, with a “tapered impact of top accounts and margin headwinds”.

Revenue in the America region fell 1.2 percent from the last quarter, because of the impact from the two large accounts, said Srikrishna.  Asia Pacific grew 20 percent in the September quarter, while Europe grew 2.5 percent.

“In 2018, we will have an additional focus on one new geography which we will announce,” said Srikrishna.