Motilal Oswal: Hexaware Technologies - Surprising Q2 Performance, But Defensive Outlook
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Motilal Oswal Report
Despite the sharp decline in travel and transportation vertical (-27% QoQ), overall revenue remained largely stable for Hexaware Technologies Ltd.
This was driven by robust performance in banking financial services and insurance and Healthcare verticals (approximately3.5% QoQ, each).
Sequentially, headcount declined 6% YoY, driving strong Improvement in utilizations (approximately 330 basis point) and gross margin (approximately 220 basis point).
Key positives were the commentary around (a) healthy deal wins in H1 CY20, (b) pipeline improvement, (c) wallet share gain in existing clients, and (d) growth in Freddie Mac account. However, ‘flat to small’ volume growth guidance for H2 CY20 does not echo similar optimism.
The same goes for expectation of Ebitda margin stability (versus H1 CY20), implying sequential drop (versus Q2 CY20).
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