Multi Baggers
SJHCSJV
BSE ID : 532129 NSE ID : SHBCHS
RECOMMENDED PRICE 66.30
PEAK FROM RECO 557.40 740.72%
CURRENT PRICE 470.75 Resource id #15
Presently, Hexaware Technologies is trading at Rs 66.50 which is at a consolidated PE of 10.64x and 9.05x to its CY11E and CY12E EPS of Rs 6.25 and Rs 7.35 respectively. Since the stock offers good investment opportunity, we initiate a ‘BUY’ signal on the stock with a target price of Rs 90.
Hexaware Technologies
Hexaware Technologies expects second quarter revenue in the range of $ 74.5-75 million along with sustaining or improving the operating margins at the current levels for calendar year 2011.
The company added 10 clients in the first quarter, 3 in the Americas, 3 in Asia Pacific and 4 in Europe; 180 active clients at the end of Q1 2011. Of these, 2 clients were added in the Banking, Financial Services and Insurance domain, 5 clients in Enterprise Solutions space, 2 clients in Quality Assurance & Testing Services, and 3 clients in Business Process Outsourcing space.
For the quarter just completed, 66.0% of revenues originated from Americas, 27.9% from Europe, and the remaining 6.1% from the Asia Pacific region. The share of revenues from the new client wins increased to 6.8%; highest in the last twelve months. Global Headcount increased to 6,664 at the end of March 2011; 125 freshers inducted during Q1 2011. Blended utilization for the quarter improved sequentially to 72.7%; up from 69.4%. The overall client acquisition remained good and the growth in the
existing accounts too is positive.
The company has registered strong numbers for the quarter ending March 2011. Revenues surged about 44% from a year ago quarter to stay at Rs 3185.41 million translating operating profit of Rs 448.75 million which skyrocketed from year ago quarter. The company witnessed improvement in margins too which is due to volume growth which represents 5% of the increase. There was a pricing improvement of 1%-1.5%, both onsite and offshore along with SG&A remaining at the same level; driving the net profit to Rs 538.35 million in Q1CY11, a surge of 36% YoY.
Valuation:
Presently, Hexaware Technologies is trading at Rs 66.30 which is at a consolidated PE of 10.64x and 9.05x to its CY11E and CY12E EPS of Rs 6.25 and Rs 7.35 respectively. Since the stock offers good investment opportunity, we initiate a ‘BUY’ signal on the stock with a target price of Rs 90 expecting an appreciation of about 35% from the current level with the medium to long term investment horizon.
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