Top News

The stock rose 4.47 per cent to close at Rs 808.75. Brokerage Nuvama Institutional Equities initiated coverage on Hexaware with a 'Buy' rating and a target price of Rs 950, citing the company's strong growth prospects, solid client base and healthy margin profile. "Hexaware, with a topline of $1.4 billion and market cap of Rs 43,800 crore, is part of the mid-cap IT universe, which we believe shall continue to outgrow and outperform large-cap peers. We envisage solid growth over the next few years driven by a revenue base in a 'sweet spot', coveted clientele, strong presence across verticals and service lines, and a robust cash flow profile," Nuvama said. The brokerage expects Hexaware to deliver a revenue CAGR of 11 per cent (USD) during CY24-27E, while margin expansion of 250 basis points (bps) is likely to drive EBIT and EPS CAGR of 19 per cent and 18 per cent, respectively. At current levels, Hexaware trades at 28x/24x CY26E/27E PE, broadly in line with peers LTIMindtree and Mphasis. On profitability, Nuvama noted that Hexaware has historically maintained EBITDA margins of 15-16 per cent, barring the last three years due to exceptional items. With ERP transformation and other one-off costs expected to taper off by H2CY25, margins are likely to improve. The domestic brokerage estimates adjusted EBITDA margin to climb to 17.4 per cent by CY27, alongside a stable cash flow profile, with OCF/EBITDA ratio of 84 per cent, ahead of midcap peers. Separately, Hexaware has partnered with upGrad Enterprise, the corporate skilling arm of upGrad, to launch Agentic Academy -- an initiative aimed at equipping its global workforce for the next wave of enterprise AI: Agentic systems.