Hexaware Technologies reports 22.8% Net Income growth and 21.0% Revenue growth
03-02-2016 • About Hexaware Technologies (
$HEXAWARE) • By InTwits
Hexaware Technologies reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hexaware Technologies is a fast growth stock: FY2015 revenue growth was 21.0%, 5 year revenue CAGR was 24.3% at FY2015 ROIC 35.7%
- Hexaware Technologies has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 3.6%.
- CAPEX is quite volatile: 1,367 in FY2015, 604 in FY2014, 411 in FY2013, 744 in FY2012, 633 in FY2011
- The company has highly profitable business model: ROIC is at 35.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hexaware Technologies ($HEXAWARE) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 14,505 | 19,482 | 22,853 | 25,817 | 31,235 | 21.0% |
| SG&A | | | | | 151 | |
| EBITDA | 2,614 | 4,041 | 5,130 | 4,776 | 5,358 | 12.2% |
| Net Income | 2,670 | 3,276 | 3,791 | 3,202 | 3,932 | 22.8% |
Balance Sheet
|
|---|
| Cash | 487 | 676 | 1,226 | 2,865 | 3,862 | 34.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 633 | 744 | 411 | 604 | 1,367 | 126.3% |
Ratios
|
|---|
| Revenue growth | 37.5% | 34.3% | 17.3% | 13.0% | 21.0% | |
| EBITDA growth | 186.7% | 54.6% | 26.9% | -6.9% | 12.2% | |
| EBITDA Margin | 18.0% | 20.7% | 22.4% | 18.5% | 17.2% | -1.3% |
| Net Income Margin | 18.4% | 16.8% | 16.6% | 12.4% | 12.6% | 0.2% |
| SG&A, % of revenue | | | | | 0.5% | 0.5% |
| CAPEX, % of revenue | 4.4% | 3.8% | 1.8% | 2.3% | 4.4% | 2.0% |
| ROIC | 23.8% | 33.5% | 39.2% | 34.7% | 35.7% | 1.0% |
| ROE | 26.9% | 29.5% | 31.6% | 25.7% | 28.9% | 3.2% |
| Net Debt/EBITDA | -0.2x | -0.2x | -0.2x | -0.6x | -0.7x | -0.1x |
Revenue and profitability
Hexaware Technologies's Revenue jumped on 21.0% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 18.5% to 17.2% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 4.4%. The company's CAPEX/Revenue increased slightly on 0.56 pp from 3.8% in FY2012 to 4.4% in FY2015. Average CAPEX/Revenue for the last three years was 2.8%.
Return on investment
The company operates at high and attractive ROIC (35.73%) and ROE (28.87%). ROIC increased slightly on 1.0 pp from 34.7% to 35.7% in FY2015. ROE increased on 3.2 pp from 25.7% to 28.9% in FY2015.
Leverage (Debt)
The company has no debt. Cash jumped on 34.8% in FY2015.
Management team
R Srikrishna is a the company's CEO. R Srikrishna has spent 4 years at the company.
Appendix 1: Peers in IT Consulting & Software
Below we provide Hexaware Technologies benchmarking against other companies in IT Consulting & Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ramco Systems ($RAMCOSYS) | | 9.3% | 7.3% | 9.9% | 37.0% |
| Cyient ($CYIENT) | | 30.7% | 20.6% | 17.8% | 24.0% |
| Empower India ($EMPOWER) | | -3.7% | -13.2% | -32.6% | 23.9% |
| Tech Mahindra ($TECHM) | | 6.8% | 25.2% | 174.0% | 20.1% |
| Mindtree ($MINDTREE) | | 26.6% | 23.2% | 28.8% | 17.0% |
| |
|---|
| Median (20 companies) | -44.3% | 22.7% | 20.6% | 14.3% | 9.1% |
|---|
| Hexaware Technologies ($HEXAWARE) | | 34.3% | 17.3% | 13.0% | 21.0% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($TCS) | | | | 47.4% | 42.4% |
| Infosys ($INFY) | 45.3% | 41.3% | 98.1% | 35.9% | 38.3% |
| Mindtree ($MINDTREE) | 32.8% | 31.5% | 36.2% | | 34.8% |
| Wipro ($WIPRO) | 31.5% | 29.2% | 30.4% | 32.0% | 31.6% |
| |
|---|
| Median (4 companies) | 34.7% | 32.7% | 36.2% | 35.9% | 36.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oracle Financial Services Software ($OFSS) | 37.4% | 35.3% | 35.2% | 37.4% | 39.7% |
| Infosys ($INFY) | 32.5% | 31.6% | 27.9% | 26.3% | 27.1% |
| Tata Consultancy Services ($TCS) | 29.9% | 29.5% | 28.6% | 30.7% | 26.1% |
| Wipro ($WIPRO) | 21.1% | 19.1% | 20.9% | 22.4% | 22.3% |
| Mindtree ($MINDTREE) | 11.8% | 15.1% | 19.8% | 20.6% | 20.3% |
| |
|---|
| Median (24 companies) | 18.0% | 15.1% | 16.5% | 18.3% | 13.2% |
|---|
| Hexaware Technologies ($HEXAWARE) | 18.0% | 20.7% | 22.4% | 18.5% | 17.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ramco Systems ($RAMCOSYS) | 16.4% | | 22.1% | 15.3% | 12.4% |
| Niit Technologies ($NIITTECH) | 4.1% | 5.9% | 4.6% | 6.1% | 7.9% |
| Financial Technologies (India) ($FINANTECH) | 64.7% | 8.6% | 11.2% | | 6.5% |
| Mindtree ($MINDTREE) | 5.6% | 2.5% | 4.5% | 5.0% | 5.6% |
| Tech Mahindra ($TECHM) | 3.0% | 5.4% | 2.6% | 5.0% | 5.0% |
| |
|---|
| Median (19 companies) | 4.0% | 3.8% | 3.5% | 3.5% | 3.1% |
|---|
| Hexaware Technologies ($HEXAWARE) | 4.4% | 3.8% | 1.8% | 2.3% | 4.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($TCS) | 47.1% | 48.6% | 48.4% | 50.2% | 40.5% |
| Mindtree ($MINDTREE) | 14.9% | 24.9% | 34.6% | 36.2% | 32.0% |
| Sqs India Bfsi ($SQSBFSI) | 0.1% | 12.1% | 27.0% | 29.4% | 30.6% |
| Tech Mahindra ($TECHM) | 19.2% | 15.4% | 20.1% | 43.0% | 29.7% |
| Cmc ($CMC) | 31.5% | 26.2% | 33.2% | 35.3% | 26.0% |
| |
|---|
| Median (29 companies) | 16.0% | 19.1% | 20.4% | 22.9% | 19.4% |
|---|
| Hexaware Technologies ($HEXAWARE) | 23.8% | 33.5% | 39.2% | 34.7% | 35.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 3I Infotech ($3IINFOTECH) | 3.5x | 8.5x | 20.3x | 27.7x | 14.7x |
| Ramco Systems ($RAMCOSYS) | 4.0x | 8.8x | | 27.6x | 4.2x |
| Onward Technologies ($ONWARDTEC) | 2.7x | 2.4x | 2.2x | 4.1x | 1.9x |
| Kpit Technologies ($KPIT) | -0.7x | 0.3x | 0.5x | 0.7x | 0.4x |
| Mphasis ($MPHASIS) | 0.0x | -0.1x | 0.2x | | 0.2x |
| |
|---|
| Median (22 companies) | -0.1x | -0.0x | -0.2x | -0.2x | -0.2x |
|---|
| Hexaware Technologies ($HEXAWARE) | -0.2x | -0.2x | -0.2x | -0.6x | -0.7x |
