Hexaware Technologies - Downgrade one notch to ACCUMULATE - Emkay

We recently spoke to Hexaware management to update ourselves on the business prospects. Key takeaways:

- September qtr inline with initial guidance (US$ 92.5-94 mn). Margins are expected to be flat sequentially at ~23% despite onsite wage increments. PAT to be impacted by forex losses.

- Co continues to maintain it's CY12 revenue guidance of US$ 370 mn which implies a 3-6% QoQ growth for Dec'12 qtr. Hiring is on track with initial outlook.

- Co has signed 2 US$ 10 mn+ TCV deals in CY12YTD and continues to make investments in driving greater footprint within top 30 clients through dedicated account managers.

- Downgrade to ACCUMULATE (V/s BUY earlier), given ~130/65% upmove since our initiation/12M. Valuations at ~11/10xCY12/13E P/E decent given ~5% dividend yield

Source : Equity Bulls

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