Hexaware net slips 12.3 per cent

The rupee appreciation has foxed IT firms to such an extent this quarter that it prompted Mumbai-based IT-BPO services provider, Hexaware Technologies, "not to provide further guidance till the rupee reaches a relatively stable level".

For its quarter ended June 30, the company's net profit dropped by 12.3 per cent to Rs 26.12 crore compared with Rs 29.78 crore for the corresponding quarter in the previous financial year. Revenues, however, clocked Rs 261.64 crore, a 26.5 per cent jump over the previous year's figure of Rs 206.87 crore.

On a sequential basis, net profit dropped by 25.8 per cent and its gross revenue dropped 1 per cent.

The company's gross margins were down 3 per cent at 36.4 per cent "on account of salary increments and the impact of the foreign exchange". Operating margins took a hit of 2.8 per cent to 10 per cent.

"This has been a challenging quarter solely on account of the highest ever rupee appreciation in a single quarter, our revenues would have been higher by Rs 21.5 crore and PAT by Rs 8.4 crore otherwise. This ongoing volatility in the currency markets had placed a premium on delivering faster efficiency gains and tighter execution. The sharp improvement in utilisation levels and significant enhancement in employee productivity bear a testimony to our ability to rise to this challenge," said Atul Nishar, executive chairman, Hexaware Technologies.

"However, we reiterate our earlier mentioned intent of doubling our revenues within 8-10 quarters beginning January 2007," he added.