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Hexaware bags US$250mn contract – largest contract till date
Hexaware Technologies (Hexaware) has bagged a contract worth US$250mn
(~`1,265cr) from a UK-based client for a period of five years, starting January 1,
2012. This is from an existing client of the company and Hexaware will garner
US$60mn worth of incremental business through this contract (annually
US$12mn). Additional revenue from this engagement will begin to accrue from
1QCY2012. This is a single largest contact ever signed by the company.
Under the contract, Hexaware is expected to ramp up its team, servicing the client
with a peak strength of 800 personnel (from 600 currently), operating in dedicated
global delivery centers. As part of this engagement, Hexaware will continue to offer
services that will cut across verticals, including enterprise solutions, application
management services and remote infrastructure and testing services. On the
margin front, management indicated that there is no one-time cost incurred by the
company for this deal and the company’s operating margin will be maintained.
The ramp up of this deal is expected to start from early 2012, the peak of which is
expected to reach by 4QCY2012. So, we expect this deal to garner additional
US$9mn-10mn incremental revenue in CY2012 for Hexaware. We have changed
our CY2012 estimates for Hexaware. We continue to remain positive on Hexaware and recommend an Accumulate
rating on the stock with a revised target price of `94.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Hexaware bags US$250mn contract – largest contract till date
Hexaware Technologies (Hexaware) has bagged a contract worth US$250mn
(~`1,265cr) from a UK-based client for a period of five years, starting January 1,
2012. This is from an existing client of the company and Hexaware will garner
US$60mn worth of incremental business through this contract (annually
US$12mn). Additional revenue from this engagement will begin to accrue from
1QCY2012. This is a single largest contact ever signed by the company.
Under the contract, Hexaware is expected to ramp up its team, servicing the client
with a peak strength of 800 personnel (from 600 currently), operating in dedicated
global delivery centers. As part of this engagement, Hexaware will continue to offer
services that will cut across verticals, including enterprise solutions, application
management services and remote infrastructure and testing services. On the
margin front, management indicated that there is no one-time cost incurred by the
company for this deal and the company’s operating margin will be maintained.
The ramp up of this deal is expected to start from early 2012, the peak of which is
expected to reach by 4QCY2012. So, we expect this deal to garner additional
US$9mn-10mn incremental revenue in CY2012 for Hexaware. We have changed
our CY2012 estimates for Hexaware. We continue to remain positive on Hexaware and recommend an Accumulate
rating on the stock with a revised target price of `94.
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