Promoter Baring Asia PE had announced its intent to delist. Hexaware’s shares will be delisted from the BSE and the National Stock Exchange (NSE) effective 9 November 2020. However, the delisting will not have any effect on the way the company does business. Hexaware Technologies had later said it will offer Rs 475 per share as the final price for its delisting offer.
“Nothing changes after delisting, we will operate in the same way as we have been operating, our vision, mission, our investment into employees and customers, nothing will change. People will keep an eye on us, we will continue to grow and be a significant player,” said R. Srikrishna, CEO and executive director, Hexaware Technologies.
The company remains confident of its growth momentum as it bets on getting customers to cloud, focus on touchless customer experiences and automation that will help reduce cost.
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Whitelane Research, an independent organisation dedicated to sourcing analysis, ranked Hexaware in Top 3 for customer satisfaction in the 2021/2022 IT Sourcing Study. This is the fifth consecutive year that the company has retained its position in the top three of the customer satisfaction ranking performance in Europe. With a score of 79% for general satisfaction, Hexaware is also rated number one across three other individual KPIs (Key Performance Indicators).
Fitch Ratings has projected Hexaware Technologies’ revenue to grow at 12-14% in the next fiscal and said the company has a “positive” credit outlook. The agency has assigned India-based Hexaware Technologies long-term foreign- and local-currency issuer default ratings (IDR) of ‘BB-‘ and said the Outlook is positive.
Fitch said it rates Hexaware based on the consolidated group profile of CA Magnum Holdings (BB-/Positive), Hexaware’s 96% parent, as it assessed access and control and legal ring-fencing as ‘Open’ under the stronger subsidiary path of Fitch’s parent and subsidiary linkage rating criteria. This approach constrains Hexaware’s rating at the same level as that of CA Magnum, it said in a statement.
Fitch said Hexaware has strong execution ability and exhibited stronger growth than peers. It has solid long-term relationships with key customers because of moderate-to-high switching costs, differentiated product offerings and high customer satisfaction.
“We forecast Hexaware’s revenue to rise by 12-14% in 2022-2023. Revenue in US dollars rose by a CAGR of 14% over the past 10 years, beating the Indian IT industry’s high single-digit percentage growth. This was supported by stable management that focused on differentiated offerings and increasing wallet share in customers’ IT budgets,” Fitch said.
Fitch said it forecasts Hexaware’s Ebitda margin to be around 17% in 2022-23 (2020: 16%; 2021 (estimated: 18%), driven by higher revenue from offshore or nearshore delivery, which is more profitable than onsite delivery revenue, a change in product mix and economies of scale.
“Fitch believes the global IT industry has solid long-term growth potential, and industry revenue will expand by high single-digit percentages in 2022-2023. We believe that IT companies will most likely benefit from higher demand for cloud, cybersecurity and application services as customers continue to upgrade digital offerings as the business environment evolves,” it said.