Information technology services firm Hexaware reported 8.6% dip in profit sequentially at Rs167.7 crore for the fourth quarter ended December 2019. On a year-on-year basis, profit was up 36%. The company follows January-December as its fiscal year.
Consolidated revenue was reported at Rs1,528.8 crore up 3% sequentially and up 22% on a year-on-year basis. For the full year, net profit was up 9.9% to Rs641.3 crore, while revenue rose 20.1 % to Rs5,582.5 crore from CY2018.
Hexaware Technologies CEO and Executive Director R. Srikrishna said, “This quarter, all verticals other than banking and financial services (BFS) have continued to show strong growth. In BFS we had one customer issue which is now behind us. There was some broader softness."
Banking and financial services took a hit with revenue dropping 6.4% on a year-on-year basis during the quarter.
He indicated the softness in BFS will continue for some time but the hit was largely from one single client this quarter which also impacted revenue from North America. The company has guided for 15-17% revenue growth in CY20 with growth expected Q2 (April Quarter) onwards.
The company reported a total contract value of deal wins worth $30 million compared to $28 million reported last quarter. A lot of new projects are coming in from healthcare, cloud migration and companies moving to platform based businesses, said Srikrishna.
“Hexaware’s Dec’19 quarter results were below par with a 1.3% QoQ c.c growth and EBIT margin decline of almost 50 bps sequentially impacted by ramp downs at top client and strong hiring in the quarter. Operational miss drove the lower than expected net profits," noted a report by Emkay Global Financial Services.
The brokerage also noted that Hexaware’s Dec’19 quarter results were below par with a 1.3% q-o-q constant currency growth and EBIT margin decline of 50 bps sequentially impacted by ramp downs at top client and strong hiring in the quarter. Operational miss drove the lower than expected net profits.
The company reported attrition rate of 15.8% which is lower than last quarter. Headcount increased by 937 during the quarter. He added that talent pressure continues to be strong, especially in US, but the company has reduced attrition this quarter to 15.7% down from 17.3% in the previous quarter. The strong hiring was driven by confidence in the deal and revenue pipeline for CY20. As has been the industry trend last year, Hexaware, is also weighing in on fresher hiring including some fresher hiring in US as well.