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Change Change %
-1.15 -0.27%

Updated:26 Apr, 2018, 15:54 PM IST

Change Change %
-1.70 -0.40%

Updated:26 Apr, 2018, 16:01 PM IST

Research Report Detail

Report Date Call Price@Call Target Price
Stop Loss
Current Status Time Horizon
01-08-2017 Hold 259.40 260.00
Target Hit Long (1Y)

Nomura maintains neutral on Hexaware Technologies

Hexaware Technologies outperformed 2Q growth expectations, and could be the fastestgrowing player in our IT coverage, with USD revenue/EPS CAGR of 12/10% over FY16-18F. Strength in IMS BPO (annuity segments which contributed 41% of incremental revenue over LTM) and BFSI (largest vertical for HEXW) are positive from longer-term growth sustainability perspective in our view.

However, investors should await better entry points given: 1) flattish revenue trends in 2H and impacts on FY18F growth due to insourcing at a top client and ramp-down at another top client and 2) the stock seems fairly valued at around 15.8x 1-yr fwd earnings (around 15% premium to historical average). We lift our TP to INR260. HEXW remains our relative preference in Tier 2 IT. HCLT (TP: INR1030, implied upside 15.35%) is our only Buy in the IT services sector.

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