Hexaware Technologies

Overview

1. History & Background:

• Hexaware Technologies was founded by Atul Nishar in 1990.
• The company went public in India in 2002 and has been listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

2. Services:

• Hexaware offers a range of services across various industry segments. These include application transformation management, business intelligence and analytics, digital assurance, infrastructure management services, and business process services.
• The company is known for its focus on automating business processes and has developed platforms and solutions centered around automation.

3. Industries Served:

• Hexaware has a diversified clientele across several sectors, including banking, financial services, healthcare, travel, manufacturing, retail, education, and more.

4. Global Presence:

• With a global delivery model, Hexaware has multiple development centers and offices across North America, Europe, and Asia-Pacific. This wide geographical presence allows it to cater to the requirements of its global clientele effectively.

5. Acquisitions & Growth Strategy:

• Hexaware has pursued a growth strategy that includes both organic growth and acquisitions. Over the years, the company has made several acquisitions to bolster its capabilities and expand its service offerings.

6. Culture & Values:

• Hexaware places a strong emphasis on its organizational culture, focusing on innovation, customer-centricity, and employee growth.

7. Recent Developments:

• In 2020, the company was acquired by Baring Private Equity Asia (BPEA), in a deal that led to the delisting of Hexaware from the Indian stock exchanges.

It’s important to note that the technology and IT services industry is dynamic and rapidly evolving. Companies in this sector often undergo changes in strategy, service offerings, and client relationships. For the most up-to-date information on Hexaware Technologies or any other company, it’s always advisable to consult the company’s official website, recent annual reports, and investor relations communications.

Hexaware Unlisted Share Price

Hexaware Investment Thesis

1. Growth in IT Services Market: With digital transformation becoming imperative for businesses worldwide, there’s a growing demand for IT services, including automation, cloud integration, and data analytics. Hexaware’s positioning in these areas could determine its growth potential.
2. Strong Client Relationships: Hexaware has established relationships with key clients across various sectors. The ability to upsell and cross-sell services to existing clients can be a strong growth driver.
3. Automation Focus: Hexaware’s emphasis on automating business processes positions it well in a market where businesses seek to optimize operations and reduce costs.
4. Global Footprint: The company’s presence across North America, Europe, and Asia-Pacific gives it access to diverse markets and clients. Its ability to cater to different geographical requirements might be a competitive advantage.
5. Financial Performance: Reviewing Hexaware’s financial metrics, including revenue growth, profitability margins, and cash flow, can provide insights into the company’s financial health and operational efficiency.
6. Acquisitions & Partnerships: Hexaware’s growth strategy, which includes acquisitions, can expand its service offerings and customer base. The integration and success of these acquisitions can be crucial for growth.
7. Competitive Landscape: Understanding Hexaware’s position vis-a-vis its competitors in the IT services industry is essential. Comparing its services, client feedback, and financial metrics with peers can provide a clearer picture.
8. Talent & Innovation: The IT industry is driven by talent and innovation. Hexaware’s ability to attract, retain, and nurture talent, coupled with its R&D investments, can be indicative of its future prospects.
9. Ownership & Management: The acquisition of Hexaware by Baring Private Equity Asia (BPEA) and the subsequent delisting might have implications for the company’s strategy and governance. The track record and decisions of the management and owners can provide insights into the company’s direction.
10. Valuation: Comparing Hexaware’s valuation metrics (if available) to industry peers and its historical averages can provide insights into whether the company is undervalued or overvalued.

Business Segments:

1. Application Transformation Management (ATM):
   • Hexaware provides services to maintain, modernize, and transform applications for its clients. This includes everything from application development to migration and integration.
2. Enterprise Solutions:
   • They offer solutions related to Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and other enterprise applications. They help clients implement, upgrade, and maintain these systems.
3. Business Intelligence and Analytics:
   • This segment focuses on helping clients make data-driven decisions. Hexaware provides services related to data warehousing, data visualization, and advanced analytics.
4. Digital Assurance:
   • Hexaware provides testing services to ensure that digital platforms and applications meet quality standards. This includes everything from functional testing to performance testing.
5. Infrastructure Management Services (IMS):
   • This area of business involves managing and optimizing a client’s IT infrastructure. Services might include cloud management, network management, and end-user computing services.
6. Business Process Services (BPS):
   • Hexaware offers business process outsourcing (BPO) solutions, which involve taking on certain business processes for clients. This could include functions like customer service, HR processes, finance processes, and more.
7. Digital & Cloud:
   • With the increasing emphasis on digital transformation, Hexaware offers services to help businesses navigate their digital journeys. This includes cloud migration, developing digital platforms, and more.

Competitive Strength:

1. Domain Expertise: Over the years, Hexaware has built deep expertise in specific industries, which can give them an edge in understanding and addressing the unique challenges faced by those industries.
2. Automation-Centric Approach: Hexaware’s strong emphasis on automation, particularly in business process services, can drive operational efficiency and provide cost-effective solutions to its clients.
3. Flexible Engagement Models: Hexaware’s ability to offer diverse and flexible client engagement models can cater to the varying needs of clients, from fixed-cost projects to time-material models.
4. Diverse Service Offerings: A broad portfolio ranging from application services to infrastructure management allows Hexaware to provide end-to-end IT solutions to its clients, making it a one-stop-shop for many of their needs.
5. Global Footprint: With offices and delivery centers across multiple continents, Hexaware can cater to global clients efficiently, ensuring round-the-clock services and local market insights.
6. Customer-Centric Approach: Hexaware’s consistent focus on customer satisfaction, as reflected in its partnerships and long-term client relationships, can be a significant competitive advantage.
7. Skilled Workforce: The IT sector is driven by talent. Hexaware’s efforts in training, upskilling, and retaining talent ensure that they have skilled professionals to cater to the evolving needs of clients.
8. Innovative Solutions: Continuous investments in R&D enable Hexaware to develop and offer innovative solutions, tools, and platforms, giving them a competitive edge.
9. Strategic Acquisitions: Hexaware has strategically acquired companies in the past to bolster its capabilities and expand its service offerings, enhancing its market positioning.
10. Strong Financial Position: A robust financial health provides resilience during economic downturns and allows for necessary investments to drive growth.
11. Agility: As a mid-sized player in the IT services industry, Hexaware might have more agility compared to some of the larger giants, allowing for quicker decision-making and adaptability to market changes.

Valuations:

Financials of Hexaware Technologies Unlisted Shares:

• Price-to-Earnings (P/E) Ratio:
  • This ratio compares a company’s stock price to its earnings per share (EPS). It’s a measure of how much investors are willing to pay for a dollar of the company’s earnings.
• Discounted Cash Flow (DCF) Analysis:
  • This method involves estimating a company’s future cash flows and discounting them back to the present value using a discount rate (typically the weighted average cost of capital). This gives an intrinsic value of the company based on its projected cash flows.
• Enterprise Value (EV) to EBITDA Ratio:
  • EV to EBITDA compares the value of the whole company (including debt) to its profitability before interest, taxes, depreciation, and amortization. It’s especially useful for companies with significant debt.
• Price-to-Book (P/B) Ratio:
  • This ratio compares a company’s stock price to its book value per share, reflecting how much value the market places on the net assets of a company.
• Price-to-Sales (P/S) Ratio:
  • This ratio compares a company’s stock price to its revenue per share, and it’s particularly useful for valuing companies with strong sales but low or no profitability.
• Relative Valuation (Comparables or “Comps”):
  • This method involves comparing a company’s valuation metrics to those of similar companies or industry averages.
• Dividend Discount Model (DDM):
  • This method is used for companies that regularly pay dividends. It’s similar to DCF but focuses on dividends instead of cash flows.