Hexaware Technologies reports 13.2% revenue growth in FY2016 and 0.90 pp EBITDA Margin decline from 17.2% to 16.3%
07 Feb 2017 • About Hexaware Technologies (
$HEXD) • By InTwits
Hexaware Technologies reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hexaware Technologies is a fast growth stock: FY2016 revenue growth was 13.2%, 5 year revenue CAGR was 19.5% at FY2016 ROIC 33.3%
- The company has highly profitable business model: ROIC is at 33.3%
- It operates with high leverage: Net Debt/EBITDA is -0.7x while industry average is -0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hexaware Technologies ($HEXD) key annual financial indicators
| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 19,482 | 22,853 | 25,817 | 31,235 | 35,349 | 13.2% |
| SG&A | | | | 151 | | -100.0% |
| EBITDA | 4,041 | 5,130 | 4,776 | 5,358 | 5,747 | 7.3% |
| Net Income | 3,276 | 3,791 | 3,202 | 3,932 | 4,171 | 6.1% |
Balance Sheet
|
|---|
| Cash | 676 | 1,226 | 2,865 | 3,862 | 4,126 | 6.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 744 | 411 | 604 | 1,367 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 34.3% | 17.3% | 13.0% | 21.0% | 13.2% | |
| EBITDA growth | 54.6% | 26.9% | -6.9% | 12.2% | 7.3% | |
| EBITDA Margin | 20.7% | 22.4% | 18.5% | 17.2% | 16.3% | -0.9% |
| Net Income Margin | 16.8% | 16.6% | 12.4% | 12.6% | 11.8% | -0.8% |
| SG&A, % of revenue | | | | 0.5% | | -0.5% |
| CAPEX, % of revenue | 3.8% | 1.8% | 2.3% | 4.4% | | -4.4% |
| ROIC | 33.5% | 39.2% | 34.7% | 35.7% | 33.3% | -2.4% |
| ROE | 29.5% | 31.6% | 25.7% | 28.9% | 26.5% | -2.3% |
| Net Debt/EBITDA | -0.2x | -0.2x | -0.6x | -0.7x | -0.7x | 0.0x |
Revenue and profitability
Hexaware Technologies's Revenue jumped on 13.2% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 10.5 pp from 4.0% to 14.5% in FY2016.
Net Income marign decreased slightly on 0.79 pp from 12.6% to 11.8% in FY2016.
Return on investment
The company operates at high and attractive ROIC (33.29%) and ROE (26.53%). ROIC decreased on 2.4 pp from 35.7% to 33.3% in FY2016. ROE decreased on 2.3 pp from 28.9% to 26.5% in FY2016.
Leverage (Debt)
The company has no debt. Cash increased on 6.8% in FY2016.
Management team
R Srikrishna is a Hexaware Technologies's CEO. R Srikrishna is a founder and has spent 4 years at the company.
Appendix 1: Peers in IT Consulting & Software
Below you can find Hexaware Technologies benchmarking vs. other companies in IT Consulting & Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Financial Technologies (India) ($FTIS) | | 50.0% | | | -2.6% |
| |
|---|
| Median (1 company) | | 50.0% | | | -2.6% |
|---|
| Hexaware Technologies ($HEXD) | | 17.3% | 13.0% | 21.0% | 13.2% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Financial Technologies (India) ($FTIS) | 0.9% | 28.1% | | -113.0% | -103.6% |
| |
|---|
| Median (1 company) | 0.9% | 28.1% | | -113.0% | -103.6% |
|---|
| Hexaware Technologies ($HEXD) | 20.7% | 22.4% | 18.5% | 17.2% | 16.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Financial Technologies (India) ($FTIS) | 8.6% | 11.2% | | 6.5% | 0.0% |
| |
|---|
| Median (1 company) | 8.6% | 11.2% | | 6.5% | 0.0% |
|---|
| Hexaware Technologies ($HEXD) | 3.8% | 1.8% | 2.3% | 4.4% | |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Financial Technologies (India) ($FTIS) | -1.0% | 5.6% | | | -7.1% |
| |
|---|
| Median (1 company) | -1.0% | 5.6% | | | -7.1% |
|---|
| Hexaware Technologies ($HEXD) | 33.5% | 39.2% | 34.7% | 35.7% | 33.3% |
