IPO Note : Hexaware Technologies Ltd by Geojit Financial Services Ltd
An AI-Enabled digital solutions provider….
Hexaware Technologies Ltd. (HTL) is a global IT services company based in Navi Mumbai, India. They provide a wide range of technology solutions, including digital transformation, cloud services, data and AI, and IT operations. HTL provide both onshore and offshore IT services, which account for 57% and 43% in CY23. It has a global delivery presence spread across the Americas (71.5% revenue in CY23), Europe (22.1%) and APAC (6.4%). Hexaware helps businesses across various industries like financial services, healthcare, and manufacturing to improve their operations and customer experiences.
* The IT Services and Business Process Services (BPS) market is projected to reach ~Rs.343.0 trillion by CY29, with IT Services expanding at a CAGR of about 7.2% and BPS at around 2.5% over the CY2024-29E period.
* Hexaware's revenue increased from Rs.7,177.7cr in CY21 to Rs.10,380.3cr in CY23, recording a CAGR of 20.3%. This growth was largely attributed to a rise in the number of customers and higher revenue generation from existing clients.
* The company’s EBITDA increased from Rs.1,132.9cr in CY21 to Rs.1,581.1cr in CY23, achieving a CAGR of 18.1%. Meanwhile, PAT rose to Rs.997.6cr, registering a CAGR of 15.4% over the CY21-23 period.
* Hexaware leverages AI-based platforms such as RapidX for digital transformation, Tensai for AI automation, and Amaze for cloud adoption, positioning itself to capitalize on future IT spending trends and digital transformation initiatives across industries.
* Hexaware has established strategic partnerships with Adobe, AWS, Backbase, DataRobot, Microsoft, Oracle, etc.
* At the upper price band of Rs.708, Hexaware is available at a P/E of 43.1x(CY23), which is fairly valued compared to its listed peers. The government support for outsourced services and India's well-established IT infrastructure, bolstered by strong telecommunications and innovative facilities, improves the company's delivery capabilities.
* With a consistent financial performance featuring better margins, the company is well -positioned for future success. We recommend subscribing to this issue for long-term investment.
Purpose of IPO
The issue is primarily an Offer for Sale (OFS) of up to 12,358,757 equity shares totaling Rs. 8,750 cr by the Promoter CA Magnum Holdings. The objective of the issue is to achieve the benefits of listing the equity shares on the stock exchanges.
Key Risks
* Vulnerable to cyber-attacks, computer viruses, ransomware and electronic breakins, which could disrupt the operations.
* Business is subject to evolving privacy and data protection laws.
* The company's shares were delisted in 2020 to gain control and reduce costs
Peer Valuation
For More Geojit Financial Services Ltd Disclaimer https://www.geojit.com/disclaimer
SEBI Registration Number: INH200000345
