Hexaware Technologies (HEXT) Q4 2002 earnings summary

Executive summary

• FY02 consolidated revenue was Rs. 2,491.87m; net profit after tax and associate profit was Rs. 57.50m, including Rs. 35.27m from an associate.

• Core software and consultancy revenue rose 11.82% YoY to Rs. 2,485.92m, while consolidated revenue fell from Rs. 2,966.02m in FY01.

• India software and consulting revenue rose 92.82% to Rs. 977.01m; operating profit margin expanded to 18.91%. Prior-year India figures include the Training Division through March 2001 and are not directly comparable.

Financial highlights

• Consolidated PBT was Rs. 6.50m; PAT before associate profit was Rs. 22.24m, and PAT including associate profit was Rs. 57.50m.

• Standalone India PAT was Rs. 74.75m versus Rs. 16.07m in 2001; FY01 included Training Division results, limiting comparability.

• Standalone India operating profit (EBITDA) rose 14% to Rs. 188.80m from Rs. 165.40m; operating margin increased to 18.90% from 14.11%.

• Consolidated basic and diluted EPS were Rs. 2.60 and Rs. 2.22; standalone basic and diluted EPS were Rs. 3.38 and Rs. 2.88.

• Operating cash flow and cash balances showed differing consolidated and standalone positions; year-end cash and bank balances were Rs. 507.62m consolidated and Rs. 380.35m standalone.

Outlook and guidance

• Five-year order book exceeded US$100m; multi-year projects were expected to begin contributing revenue in 2003.

• Two major multi-year, multi-million-dollar projects secured from German clients were expected to strengthen European market presence.

• 2003 priorities included infrastructure, sales and marketing investment, expanded offshore delivery, improved utilization and higher margins; no quantified earnings guidance was stated.