Hexaware Q1 net profit dips 11% to Rs 70.3 crore

Company had registered a net profit of Rs 79 crore in the same quarter last fiscal

IT firm Hexaware Technologies today reported a 11.3% decline in net profit at Rs 70.3 crore for the quarter ended March 31, 2014.

The company had registered a net profit of Rs 79.3 crore in the same quarter last fiscal, Hexaware said in a statement.

However, its revenues were up 16% at Rs 588.9 crore in the reported quarter from Rs 507.7 crore in the January-March quarter of 2013.

"Though this quarter has been soft, we expect a healthy growth in revenue in Q2 2014 on the back of the visibility from our existing customers and our deal pipeline," Hexaware Technologies CEO and Vice Chairman P R Chandrasekar said.

During the quarter, Hexaware experienced decline in revenue from some of its top 10 customers.

"This was primarily due to some project closures as well as budget re-allocation to other initiatives on the client side. However, the relationships with all these customers continue to be strong and the company expects a healthy growth from the same set of clients in the coming quarters," it said.

During the quarter, Hexaware added 11 new clients across all its key focus areas.

Of these, one client was added in the Banking and Financial Services (BFS) domain, two clients each were added in healthcare and insurance (H&I) and travel and transportation vertical, and three clients in manufacturing.

"The company expects to register healthy revenue growth Q-o-Q and an improvement in operating margin in Q2 2014," Hexaware said.

To enable future growth prospects, Hexaware has added 167 freshers offshore during the quarter, Chandrasekar said adding that the company has also added 14 people in its field sales force for sales and marketing activities.

"We have engaged a leading consulting firm to provide advisory on sharpening the 'Go to Market' strategy, conducting portfolio assessment of our micro-verticals and to institutionalise sales excellence processes," Chandrasekar said.

This initiative will drive the company on its long-term growth path, he added.

The Board of Directors declared a first interim dividend of Rs 3 per share (150%) on equity share of Rs 2 each.

This would result in a cash outflow of Rs 105 crore for dividend payment including tax.

Shares of the company were trading at Rs 153.70 apiece in afternoon trade, down 10.43% frm its previous close on the BSE.