Hexaware Technologies's earnings were largely stable as revenue was in-line while margins beat estimates. The IT firm has also cut its revenue guidance marginally from 20 percent to 19 percent.
Hexaware's net profit declined by 1.4 percent to Rs 151.4 crore for the first quarter ended June 30. Revenue increased by 15.1 percent to Rs 1,308.3 crore in the quarter as compared to Rs 1,136.7 crore in the year-ago period.
In dollar terms, the net profit declined by 4 percent to $21.8 million, while revenue grew 12 percent to $188.5 million in the said quarter on a year-on-year basis.
CEO R Srikrishna said, "If the Mobiquity acquisition we had consolidated from April 1 instead of June 13 or so, our revenues would have been higher by $17.6 million and our net profit would have been higher by $1.7 million,” he said.
“We did bring down our overall guidance a tad from 20 percent growth to 19 percent and that has contributed predominantly or entirely by this one client. The impact from that client is larger than this but we are doing better than expected in all of the pockets. So there was a bit of an impact on the organic guidance but it is still well within the range that we gave originally,” he added.
When asked if this mortgage client impact growth in calendar 20 also, he replied, “We don’t know for sure but our earlier anticipation is it will be a positive for growth this CY20.”
“We certainly expect that Q3 will be, at this level, a little better. That is what we see every year that our Q2 and Q3 margins are nice. Q4 may come down a little bit, that usually happens because there are clients that do furloughs and we don’t recover cost fully on those furloughs. So Q4 there is a bit of variability but we certainly expect Q3 margins will continue to be as robust as Q2 maybe a little better,” said Srikrishna.
In terms of deal wins, he further mentioned, “H1 to H1 we are up. So our H1 wins are better than H1 wins last year. If wins to accelerate each year in Q3 and Q4 mainly in Q4, that we expect to continue that we will have robust bookings in Q3 and Q4. So currently at H1 level, we are better off than what we were last year H1.”