Hexaware Technologies (HEXT) Q4 2013 earnings summary

Executive summary

• FY2013 revenue rose 17.3% in rupees to ₹22,853.48 million and 6.4% in dollars to $387.79 million; net profit increased 15.7% to ₹3,791.35 million. EBITDA margin improved 170 bps to 22.4%.

• Growth reflected higher volumes and realized billing rates, cost efficiency, SG&A leverage and currency benefits; Q4 crossed $100 million in revenue and ₹1 billion in net profit for the first time.

• Repeat clients generated 95.5% of revenue, while 48 new clients lifted active clients to 233; 10 largest clients contributed 53% of revenue.

Financial highlights

• Revenue from operations was ₹22,853.48 million versus ₹19,481.78 million in 2012; EBITDA was ₹5,122.30 million versus ₹4,040.37 million.

• Operating profit, excluding exchange differences, interest, other income and tax, rose 27.45% to ₹4,736.26 million; profit before tax increased 18.70% to ₹4,794.97 million.

• Net profit was ₹3,791.35 million versus ₹3,276.47 million; reported basic EPS was ₹12.70 versus ₹11.09 and diluted EPS was ₹12.59 versus ₹10.89.

• Cash and cash equivalents, including mutual fund investments, increased 47% to ₹6,564 million; cash from operating activities rose 52.7% to ₹3,358.10 million.

Outlook and guidance

• Management was optimistic for 2014, expecting improving global conditions and IT spending to support growth; plans included organic and inorganic opportunities and investment in Social, Mobility, Analytics and Cloud technologies.

• Global IT spending was forecast to rise 3.1% in 2014 to $3.7 trillion; Indian IT-BPM exports were projected to grow 12–14% to $87 billion and domestic revenue 13–15% to ₹1,200 billion.

• Growth priorities included expanding sales and delivery teams, entering emerging markets, deepening existing accounts and building ERP, SMAC and Big Data capabilities.