Hexaware Technologies - Result vindicate positive thesis, raise TP to Rs 80: Emkay

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Hexaware Technologies

Result vindicate positive thesis, raise TP to Rs 80

ACCUMULATE

CMP: Rs 70                                       Target Price: Rs 80

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n     Hexaware reported rev at US$ 70.4 mn (+5.7% QoQ), in line with est. We are positively surprised by co’s mgn show as they expanded by ~280 bps QoQ ( V/s +190 bps expectations)

n     Op metrics performance solid with growth led by EAS (+14%QoQ) and Europe (+21% QoQ) with utilization improving by ~330 bps QoQ to 72.7%

n     Co guides for a strong 6-6.5% QoQ gwth in June’11 qtr. CY11 rev guidance raised to 27.6%(V/s 25% earlier), however still remains conservative as it bakes in flat revenues in H2CY11

n     Raise CY11/12E earnings by ~14%/11% to Rs 6.5/7.4 driven primarily by higher margin assumptions. Retain ACCUMULATE with a revised TP of Rs 80 (V/s Rs 66 earlier)