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Hexaware June quarter profit rises 10%

Net profit rose to Rs.97.9 cr, up 23.5% sequentially; Revenue rose to Rs.536.6 cr, up 7.3% from a year ago
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First Published: Fri, Jul 19 2013. 03 31 PM IST
Cash and cash equivalents in the June quarter increased to Rs587 crore, from Rs566 crore as of 31 March. Photo: Hemant Mishra/Mint
Cash and cash equivalents in the June quarter increased to Rs587 crore, from Rs566 crore as of 31 March. Photo: Hemant Mishra/Mint
Updated: Fri, Jul 19 2013. 06 03 PM IST
Mumbai: Mumbai-based software services exporter Hexaware Technologies Ltd posted a 10% increase in net profit in the June quarter from the year earlier.
Net profit rose to Rs.97.9 crore—it was up 23.5% sequentially. Revenue rose to Rs.536.6 crore, up 7.3% from a year ago and 5.7% sequentially, in line with analyst expectations.
The company said on Friday that revenue in the September quarter is likely to be between $98.1 million and $100 million, a 3.5-5.5% sequential growth.
The net profit margin increased by 260 basis points, or bps, sequentially to 18.2%. One bps is one hundredth of a percentage point.
Cash and cash equivalents in the June quarter increased to Rs.587 crore, from Rs.566 crore as of 31 March. The company added 14 clients in the second quarter and its head count stood at 8,700 on 30 June.
“As guided last quarter, Hexaware’s profitability has materially improved across the board to healthy levels—gross margin at 39.4%, Ebitda (earnings before interest, tax, depreciation and amortization) at 23.7% and PAT (profit after tax) at 18.2%. We believe going forward our margins will remain healthy,” said Atul Nishar, chairman of Hexaware Technologies, in a media release.
Ankita Somani, research analyst, IT and telecom, at Angel Broking, said Hexaware’s results were “broadly in line on the revenue front but exceeded expectations on the operating margin as well as on the bottom line front”.
She added that the sequential growth guidance of 3.5-5.5% “is higher than our expectation, and would result in upgrade to our CY2013E revenue estimate”.
Of the 14 clients added in the June quarter, seven are based in the Americas, two in Europe and five in the Asia-Pacific (Apac) region. The Americas contribute 67.1% to the company’s revenue in the June quarter; 26.3% came from Europe, and the remaining 6.6% from the Asia-Pacific region.
The company “has hedges worth $226 million at an effective rate of Rs.56.26 and €13 million at an effective exchange rate of Rs.74.14 maturing over the course of the next eight quarters (from July 2013 to June 2015)”, Hexaware said in the release. Attrition for the June quarter stood at 11%.
Hexaware Technologies closed 1.19% up at Rs.106.7 per share on Friday on the BSE while the benchmark Sensex gained 0.11% to 20149.85 points and the BSE IT Index gained 2.81% to 7097.29 points. For the April-June quarter, Hexaware Technologies gained 2.12% while the Sensex gained 2.97% and the BSE IT Index lost 9.15%.
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First Published: Fri, Jul 19 2013. 03 31 PM IST
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