(i) High Growth trajectory: Hexaware Technologies is on track to deliver more than 20% dollar-revenue growth this year in calendar 2012 and should do pretty well going forward as well based on the deal pipeline that they already have, plus the likelihood of the company signing more deals in the next couple of months.
| Hexaware Technologies Stock Summary | ||
| Open (Rs) | : | 125.95 |
| Days High / Low (Rs) | : | 127.30 / 124.60 |
| MarketCap (Rs cr) | : | 3,744 |
| P/E | : | 11.23 |
| EPS | : | 11.15 |
| 52-Week High (Rs) | : | 133.90 (25 Apr 12) |
| 52-Week Low (Rs) | : | 70.60 (13 Sep 11) |
| Volume (No of shares) | : | 67,109 |
There is a buzz doing the rounds that Hexaware is likely to bag significant order shortly. It has mentioned that out of the six deals that it is currently working on in terms of trying to sign those deals, one is in a very advanced stage. So, if a major deal is signed, the stock price could spurt.
(ii) Cheap Valuations: Hexaware’s valuations at about just under ten times one year forward earnings is quite compelling and protects the downside risk.
(iii) High Dividend Yield: Hexaware’s dividend yield at the current price exceeds 5%. That provides very good downside support to the stock.
Investment Thesis:
If Hexaware continues to deliver dollar revenue growth in excess of 15%, close to 20%, it can give pretty decent returns to investors of about 20% to 30% upside from the current levels on a 12-month basis. The March 2013 target price of Hexaware is Rs 143. In addition, there is a 3% dividend yield. So Hexaware is a good buy from a fundamental perspective.
Risk Factors: Uncertain global macro environment. If things turn much more difficult, then Hexaware’s revenue growth could be impacted. There could also be individual client and execution issues that nobody can predict.
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