Hexaware posts marginal revenue growth in Q1: Nasscom target conservative

MUMBAI: Mid-sized IT company Hexaware reported slight sequential revenue growth in the first quarter and the company said it believes the industry growth target for the year is conservative.

The National Association of Software and Services Companies expects the IT industry to grow between 12-14% in FY16.

“We believe this target is conservative. And while we cannot give explicit guidance, we will be working very hard to beat the target,” R Srikrishna, CEO of Hexaware said in a post-earnings interview.

Srikrishna joined Hexaware last year from HCL Technologies, as part of private equity Barings Asia’s plan to boost growth at the firm.

Hexaware, which follows a Jan-December financial year, reported first-quarter revenue of $114.9 million, up 0.3%. In constant currency, revenue grew 1.6% sequentially to $116.4 million, In rupee terms, revenue rose 0.2% sequentially to Rs 713.4 crore.

Revenue growth in the Americas offset a fall in sales in Europe and Asia-Pacific, Srikrishna said. All verticals except manufacturing grew in the quarter, he added.

“Growth came from existing clients. But we have a healthy pipeline of new clients that we are targeting,” Srikrishna said.

Hexaware’s profit after tax dropped 4.6% sequentially to $13.4 million, or about Rs 83.3 crores, as currency fluctuations hit the company’s margin. Indian IT companies have posted one of their worse Jan-March quarterly results this year, as whipsawing exchange rates in the dollar, pound, euro and yen hit their balance sheets.

The Mumbai-headquartered company’s EBIT margin dropped more than 200 basis points to 16.2%. Attrition rose to 16.6%, from 14.1% in the previous quarter.

IT firms are expecting attrition to rise as growth prospects improve in the sector.