Hexaware Tech Q2 PAT falls 13% to Rs 152 cr

The IT firm's consolidated net profit dropped 13% to Rs 152.24 crore on 1.8% increase in revenue from operations to Rs 1,569.12 crore in Q2 June 2020 over Q1 March 2020.

Profit before tax (PBT) dropped 12.3% to Rs 188.30 crore in Q2 June 2020 as against Rs 214.60 crore in Q1 March 2020. Total tax expense for the quarter fell 7.81% at Rs 36.59 crore as against Rs 39.69 crore in Q1 March 2019. The Q2 result were announced post market hours yesterday, 28 July 2020.

In terms of revenue (Constant Currency) growth, Hexaware Technologies fell 0.9% Q-o-Q (quarter-on-quarter) while it grew 11.3% Y-o-Y (year-on-year). EBITDA (post Restricted Stock Unit, or RSU) for the quarter stood at Rs 271.30 crore, registering a 16.1% Q-o-Q growth and 28.1% Y-o-Y growth.

In terms of dollars (USD), net profit skid 7.2% to $20.20 million on 10.40% rise in revenue from operations to $208.10 million in Q2 June 2020 over Q1 March 2020.

The company expects Q2 to be the bottom. Flat to small volume growth in Q3 and Q4, with normal cyclical effects overlaid in Q4. One of the Top 3 accounts that has been a headwind to growth for us over the past three quarters, returned to growth in Q2 and we expect continued growth in this account f or the foreseeable future. The firm has instituted several structural and sustainable cost improvement measures. Near term sustainable margins to be in the range of H1 actuals +/-30 bps.

Speaking on Q2 numbers, Atul Nishar, the chairman of Hexaware Technologies, has stated that: "In spite of the global crisis created by COVID-19, Hexaware has continued to excel and delight its customers. This is reflected in the EBITDA margin improvement of 240 bps Q-o-Q, USD revenue drop of only 1.2% Q-o-Q and a revenue growth of 10.4% Y-o-Y. With this Hexaware has once again reported industry leading performance."

Commenting on the Q2 earnings, R Srikrishna, the chief executive officer (CEO) and executive director (ED) of Hexaware Technologies, has said that: We expect to go back to delivering industry leading growth as the headwind from one of our Top 3 accounts recedes fully. Our impeccable execution through COVID-19 has helped us improve relationships and grow market share with our customers. Much of our improved margins are backed by sustainable initiatives.

Cash & cash equivalents at the end of Q2 June 2020 was Rs 886 crore. The board declared second interim dividend of Rs 1.5 per share (75%) on equity shares.

The company's headcount stood at 18,825 at the end of Q2 June 2020. Utilization stood at 79.8% in the quarter, highest in last four quarters while the attrition rate at the end of Q2 FY2021 reduced to 14%.

Hexaware Technologies provides IT, BPO and consulting services. The scrip slipped 0.60% to Rs 372.45 on BSE.

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