Information technology services firm Hexaware says aggressive on acquisitions

BANGALORE: Mumbai-based IT services firm Hexaware said it is aggressively scouting for acquisitions in healthcare, insurance, banking and capital market sectors, which contribute over 75% of the company’s revenues.

“We are looking to buy a focused company in one of these areas that can add value to our business. We are working with bankers as of now and expect to make an announcement in 2013,” Hexaware's chairman Atul Nishar told ET.

The mid-tier outsourcing firm that has about Rs 400 crore in cash expects to acquire a company with revenues of $40 million to $60 million based either in Europe or North America. The two geographies contribute about 93% of Hexaware’s revenues. Nishar said Hexaware is looking at a ‘closed held, niche firm’ that can strengthen its vertical strength in these regions.

On Thursday, Hexaware reported its third-quarter revenues at Rs 507.5 crore, a 39% increase from the corresponding quarter last year. The company’s profit after tax was at Rs 84 crore in the justended quarter. Hexaware, which added 12 new clients during the period, has one of the lowest attrition rates in the IT industry at 8.4%. The company has a little over 9,000 employees.

Nishar said Hexaware is optimistic about growing at 20% or more during 2012, above the 11% to 14% growth forecast from outsourcing industry body Nasscom. Last month, Hexaware's Bangalore based rival MindTree Ltd had brought down its annual revenue outlook to below 11% on back on delayed decision making by clients in the US and Europe.

“The demand environment looks positive to us despite economic uncertainties. Our focus is on winning large deals that are above $30 million. We have a fairly strong deal pipeline and consistent repeat business as of now,” he added.

Hexaware shares closed at Rs 111, down by 0.6% on BSE, on Thursday.