Why Hexaware Maintained Its Revenue Guidance For 2019 Despite A Flat Quarter

Hexaware Technologies Ltd. maintained its organic revenue growth guidance at 12-14 percent for calendar year 2019, despite lack of growth in the first quarter of the calendar year.

That’s because the mid-sized tech company expects things to pick up during the coming quarters, its Chief Financial Officer R Srikrishna told BloombergQuint. He listed four factors behind maintaining the guidance.

• The first quarter is a seasonally weak quarter. “In this context, a 2 percent sequential growth is actually good.”
• The year-on-year constant currency growth stood at 13 percent—in line with the company’s expectations.
• The ask rate going forward is 4 percent, quarter-on-quarter, “and we usually do better than that in Q2 and Q3,”he said. “So we actually expect to get ahead of the ask rate at some point in the year.”
• A lot of the guidance is based on orders in hand.

Watch the full conversation with R Srikrishna here.

Here are the Q1 result highlights:

• Revenue in constant currency terms rose 1 percent, quarter-on-quarter, to Rs 1,264 crore.
• Earnings before interest and tax fell -0.6 percent to Rs 174 crore.
• EBIT margin contracted 20 basis points to 13.8 percent.
• Net profit rose 12.2 percent to 138 crore.