Mumbai: Hexaware Technologies Ltd said it has received a $250 million (Rs 1,265 crore) order, its biggest contract, from an existing UK-based client as European companies continue to farm out work to Indian software services providers despite the debt crisis.
The UK-based company renewed an existing contract for five years and increased the value of the order by $60 million, Hexaware chairman Atul Nishar said on Tuesday. The existing order was valued at $190 million.
While an incremental revenue of $60 million in five years works out to $12 million a year, the fact that the company has been able to secure a contract from the troubled euro zone augurs well as it chases new orders, said a technology analyst with Angel Broking Ltd, who declined to be named. “They have been able to chase a large contract while even larger companies are struggling to secure new large contracts as the environment is hyper-competitive right now.”
Hexaware didn’t name the company from which it secured this contract or the industry in which it operates, citing a confidentiality agreement. Under the contract, Hexaware will increase the team size operating on this contract to 800 people spread across Chennai, Mumbai, Pune and Mexico.
This is Hexaware’s sixth deal with a value of more than $25 million since April last year. Since the beginning of the year, Hexaware shares have risen 45.66%, while the benchmark index, Sensex, has fallen 17.68%. The company’s shares on Tuesday, however, lost 2.08% to Rs 84.70, underperforming the broader benchmark Sensex, which closed 1.38% lower at 16,882.67 points.
“The ramp-up will happen over the next four quarters while revenue will begin flowing in from the first quarter of 2012,” Nishar said. He said the company was currently chasing four more large deals that were over $25 million in size.
Also See | Recent Orders (PDF)
The contract comes a week after India’s largest computer services provider, Tata Consultancy Services Ltd, announced a $2.2 billion contract from UK insurance and pension services company Friends Life, its largest order that doesn’t involving purchasing the assets of the client.
As a part of the engagement, Hexaware will continue offering services to the customer that will include enterprise solutions, application management services and remote infrastructure and testing services.
Last month, Hexaware increased its annual revenue forecast for 2011 for the third time this year to a minimum of $306 million—a growth of 32% from the previous year.
In the July-September period, the company added 12 new customers, taking the total active client base to 194 at the end of the third quarter. Hexaware follows the January-December calendar for reporting earnings.
Its hiring estimate of 1,500 people this year was exceeded in the first three quarters.