Hexaware Q1 net profit up 26.3 pc, suspends annual guidance amid COVID-19 pandemic

IT firm Hexaware Technologies on Wednesday posted a 26.3 per cent rise in net profit at Rs 175 crore in the March 2020 quarter, and said it was suspending its guidance for FY20 amid uncertainty due to COVID-19 pandemic.

The company had reported a net profit of Rs 138.4 crore in the January-March 2019 period, Hexaware Technologies said in a regulatory filing.

Its revenue increased 22 per cent to Rs 1,541.7 crore in the quarter under review as compared with Rs 1,264 crore in the year-ago period.

The company follows January-December as its fiscal year.

"COVID-19 has led to significant uncertainty in the current environment. In view of this, we suspend the guidance that was provided earlier for FY'20," it said.

In February, the company had said it expects its FY2020 revenue to grow 15-17 per cent.

IT firms like Wipro and Infosys have also suspended their practice of offering revenue growth forecast, while Cognizant had retracted its annual outlook for 2020 amid uncertainties due to COVID-19 outbreak that has disrupted businesses globally.

Hexaware's earnings per share (EPS) was at Rs 5.86 at the end of March quarter, up 26.1 per cent year-on-year.

"Our focus on operational efficiencies helped us deliver an EPS expansion in the current quarter," Hexaware Technologies Chief Financial Officer Vikash Kumar Jain said.

He added that future quarters would be a "period of uncertainties and opportunities".

"We believe our strategic themes and strong balance sheet position us well to partner with our stakeholders to come out of this crisis stronger," he said.

Hexaware said the company was early in transitioning to work from home (WFH) mode, much before the government-mandated lockdown.

Currently, 99 per cent per cent of its IT work and 80 per cent of BPS in terms of revenue is WFH, it added.

"Once the government mandated lockdown is lifted, we will be resuming services in our offices in a staggered and segmented approach starting with those delivering critical services for which onsite presence is required," Hexaware said.

Atul Nishar, chairman of Hexaware Technologies, expressed confidence that the company's strategic focus and robust execution capabilities will drive growth going forward.

In dollar terms, Hexaware's net profit rose by 18.3 per cent to USD 23.4 million, while revenue grew 17 per cent to USD 210.6 million in the said quarter on a year-on-year basis.

The company said it won deals from new customers (NN) in the first quarter with TCV (total contract value) of USD 69 million, and this was one of the best quarters of NN signings.

Its headcount stood at 19,998 people in the said quarter, with attrition at 15.1 per cent.

The company said Meera Shankar has ceased to be an independent director with effect from April 10, 2020 pursuant to completion of second term as an independent director.

The board of directors have approved the appointment of Milind Shripad Sarwate and Madhu Khatri as additional directors in the capacity of non-executive independent directors of the company with effect from April 25, 2020 for a period of three years, subject to the approval of shareholders.