Hexaware Technologies shares tank 6% on weak Q1, poor guidance

Shares of Hexaware Technologies, which recently made its return to the public markets, slipped 6 percent to Rs 779 in morning trade on July 25 after it reported a muted performance for the April-June quarter of 2025, as exceptional costs dragged down profitability. The company follows a calendar-year format for financial reporting.

Revenue in constant currency terms rose 1.3 percent, falling short of Street expectations pegged at 2.5 percent for the quarter under review, the company said in an exchange filing.

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The quarter saw a steep rise in other expenses, which surged to Rs 142 crore from Rs 8.7 crore in the year-ago period. This included customer-related provisions of Rs 78.2 crore, ERP transformation costs of Rs 12 crore, acquisition-related expenses worth Rs 12.8 crore, and an impairment of Rs 39.4 crore linked to a customer contract from an earlier acquisition.

As a result, operating performance weakened. EBITDA fell to Rs 404 crore from Rs 431 crore last year, and from Rs 527.8 crore in the March quarter. EBITDA margin dropped to 12.4 percent, down from 16.5 percent in the previous quarter and 14.7 percent a year earlier.

However, when adjusted for these one-time items, the margin improves significantly to 18.1 percent—up from 17 percent in the March quarter. The company has reaffirmed its full-year EBITDA margin guidance of 17.1–17.4 percent.

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On the business front, while smaller and mid-sized deals continue to progress, large deal closures remain stuck in prolonged decision cycles. This has led Hexaware to tone down its expectations for the remainder of the year.

IT services company Hexaware Technologies relisted on stock exchanges after four years, notching up handsome gains on February 19 as the stock ended with gains of 7 percent on debut.

The IPO comprised only an offer-for-sale by its promoter, CA Magnum Holdings, which is an investment holding company created by Carlyle to buy Hexaware. The global digital and technology services provider did not get any IPO proceeds, as all the public issue fund was received by the selling shareholder.

At about 9:25 am, shares of the company were trading at Rs 782, lower by 5.3 percent from the last close on the NSE. Hexaware Tech shares have been on a solid run lately, rising over 20 percent in the last three months.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.