MUMBAI: The stock of Hexaware Technologies has posted gains in each of the nine trading sessions and has continued its upward march during the morning trade on Monday. Its cumulative gain so far works out to be 14.4%.

 

The stock did come under pressure soon after the company reported a muted sequential revenue growth for the June 2013 quarter on Friday. But it recovered soon on account of a projection of a strong growth in the next quarter due to healthy order flow. The stock is likely to retain gains in the coming sessions and may even expand it further considering the growth prospects.

 

The Mumbai headquartered mid-tier IT services firm reported a marginal 0.8% increase sequentially in revenue at $94.8 million for the June quarter, which is its second quarter of the December ending fiscal. The company's margin at the earnings before interest and tax (EBIT margin or operating margin) rose sharply by 460 basis points sequentially to 22% helped by the weaker rupee against the major currencies and lower selling, general, and administrative expenses.

 

For the September quarter, the company has guided for a strong 3.5-5.5% sequential revenue growth following a better momentum in the US and Europe and higher order booking. The operating margin, however, is likely to remain in the narrow range of +1% and -1% of the June quarter margin assuming the rupee rate at the end of the quarter, according to the company's chairman Atul Nishar. An expected rise in the selling expenses would hold the margin in the narrow band.

 

Considering higher order flow, the company will undertake more campus recruitments or freshers. "We expect headcount to go up as over 100 fresh graduates will join us," said Nishar. The company reported a headcount of 8,700 for the June 2013 quarter.

 

He said the company is looking for candidates for a possible acquisition in the US in the range of $40-50 million, which will be funded by using the company's operating cash flows. It reported Rs 587.6 crore in cash and equivalents at the end of the June 2013 quarter. The acquisition is expected to take place by the end of the March 2014 quarter.

 

Source:TimesOfIndia