THE CORNER OFFICE (Hexaware Technologies) — Fuelling the growth engines; Supporting sustenance of revenue growth outperformance
Mr R Srikrishna, CEO & Executive Director
Mr R Srikrishna (Keech) is the CEO of Hexaware Technologies.
Prior to Hexaware, he served in HCL for over 20 years as the President of two units – Healthcare and Lifesciences and Infrastructure Services. He was instrumental in growing these units to multibillion dollar businesses.
Mr Srikrishna joined Hexaware in 2014. Since then, he is dedicated towards delivering world-class services to customers, and ensuring employee satisfaction, thereby creating and sustaining long-term profitable growth.
We met Mr R Srikrishna, CEO of Hexaware (HEXW), to discuss the company’s strategic focus, given dramatic shifts in the consumption of technology services. Since the beginning of his leadership role at HEXW, the company has focused on transformation and has recently enhanced its strategy to define its journey over the next few years. Our key takeaways:
Legacy pressures seen across the industry
Hexaware is a global provider of IT and Process outsourcing services. Co. focuses on maximizing client returns from outsourcing and off-shoring. Co. manages IT applications in real time as well as providing high value services around packaged enterprise applications such as SAP and PeopleSoft. Co. maintains operations in business process outsourcing arena. Co.'s solutions aim to provide value by optimising cost of ownership of technology investments for customers. Co. maintains a client base comprising several Global 1000 organizations. Co.'s global operations are located in North America, Europe and Asia Pacific.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Hexaware Technologies: Revenue traction intact but lopsided (HEXW IN, Mkt Cap USD1.3b, CMP INR322, TP INR365, 13% Upside, Neutral) Marginal revenue beat, but profitability short of expectations: 4QCY18 CC revenue grew 3.4% QoQ, above our estimate of +2.1%. EBITDA margin contracted 140bp QoQ to 15.3% (60bp miss), led by seasonal furloughs and wage hike. PAT declined 28.3% QoQ to INR1,234m, below our estimate of INR1,365m (-21% QoQ) due to lower operational income and higher forex losses (INR248m v/s our estimate of INR153m). Large deal wins drive sanguine revenue guidance…: For CY19, HE...
The general evaluation of HEXAWARE TECHS.LTD. (IN), a company active in the Computer Services industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 3 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date January 22, 2019, the closing price was INR 331.60 and its potential was estimated at INR 391.67.
MOrning India (15/February/19): 1. Petronet LNG (Latent potential could be immense); 2. ONGC; 3. Nestle India; 4. M&M; 5. United Breweries; 6. GSK Consumer; 7. L&T Infotech; 8. Page Industries Today’s top research idea Petronet LNG: Latent potential could be immense Increased focus of the Chinese government on gas availability, construction of distribution infrastructure and suitable policies aiding consumption helped Chinese gas consumption to grow at a CAGR of 16% during 2001-10 and by 10% during 2011-18. Comparatively, India witnessed a decline of 2% CAGR during 2011-18, primarily ...
NESTLE INDIA: Sales in-line; higher ad spends impact bottom line; CY18 ends with negative working capital cycle after almost eight years (NEST IN, Mkt Cap USD14.4b, CMP INR10612, TP INR11475, 8% Upside, Neutral) Net sales increased 11.4% YoY to INR29b (our estimate: INR28.8b) in 4QCY18. Domestic sales grew by 12% YoY, driven by higher volumes. Export sales were flat YoY at INR1.9b due to lower exports to Bangladesh and the UAE. EBITDA declined 4.8% YoY to INR6.1b (our estimate: INR7.2b), while adj. PAT was down 4.3% YoY to INR4b (our estimate: INR4.6b). Gross margin was flat YoY at 58....
TeamLease Services: TeamLease to acquire IT staffing biz of eCentric Solutions (TEAM IN, Mkt Cap USD0.7b, CMP INR2794, TP INR3400, 22% Upside, Buy) TeamLease Services (TEAM) has announced the acquisition of eCentric Solutions’ IT staffing business, which has 880 associates and revenue of INR450m (as of FY18). The company will pay 4.5x PBT (~INR150-180m) or the acquisition through its subsidiary TL Digital by way of slump sale on a going-concern basis. The consideration will be payable in two tranches, on transfer of clients and transition support. About eCentric Solutions eCentric is...
Quess Corp: Quess3.0: Betting on the shift – unorganized to formalization; Transformation from a peoples services to a platform-based business (QUESS IN, Mkt Cap USD1.3b, CMP INR649, TP INR730, 12% Upside, Neutral) We attended Quess Corp's (QUESS) Analyst Day, where the company shared its view on the key verticals and the strategy to drive the business toward its vision. Key highlights: Strategy toward platforms: QUESS started as a people services company with a focus on manpower deployment and peripheral managed services. However, over the years, it has transformed itself into an all-...
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