Stock @ ₹891 | P/E 46.6x | ROE 23.3% | FY24 PAT ₹1,174 Cr
1. 🧠 At a Glance
Hexaware Technologies, recently re-listed via India’s largest-ever IT IPO (₹8,750 Cr), has returned to the public markets swinging GenAI buzzwords like Thor’s hammer. Backed by PE giant Carlyle and now chasing midcap growth glory, this AI-led IT services company has scale, ambition, and… a valuation that would make even Persistent blush.
2. 🎬 Introduction with Hook
Once delisted by Carlyle at ₹475, now re-listed at ₹630 and racing toward ₹900 — Hexaware is having its rebirth moment. It’s got:
🧠 AI everything
📈 19% 3Y revenue CAGR
🏆 More awards than a Bollywood film during IIFA season
But behind all this glam, is the business solid enough to justify the hype? Or is this just another SaaSified IT firm with marketing muscle and mid-tier execution?
3. 💼 WTF Do They Even Do? (Business Model)
Hexaware is in the classic “Digital + AI + Cloud + ERP + Whatever’s Trending” bucket. Specifically:
- Core offerings:
- Application services
- Cloud transformation
- Data & AI platforms
- Product engineering
- Enterprise solutions (Oracle, SAP)
- Clients: BFSI, healthcare, manufacturing, consumer & public sector
- Delivery: Global centers in India, US, UK, Poland, Mexico
And now… ULTRAVOX. Their voice-AI partnership with Fixie.ai to make enterprise ops “smarter.” Because why not.
4. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY22 | FY23 | FY24 | Trend |
|---|---|---|---|---|
| Revenue | ₹9,200 Cr | ₹10,380 Cr | ₹11,974 Cr | 🔼 +30% in 2 yrs |
| Net Profit | ₹884 Cr | ₹998 Cr | ₹1,174 Cr | 🔼 ~15% CAGR |
| EBITDA Margin | 13% → 15% | Low but expanding | ||
| ROE | 23% | Solid | ||
| 5Y Sales CAGR | 16% | 5Y PAT CAGR | 12% |
Steady. Profitable. Predictable. But not cheap.
5. 🔍 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 46.6x
- P/B: 10.1x
- Dividend Yield: 0.65%
- PEG Ratio: >3 = meh
- EV/EBITDA: >25x
Yes, it’s cheaper than Persistent, but way more expensive than Infosys. PE funds want their exit, and you’re funding it.
🎯 Fair Value Range (FY25E EPS ₹20–22):
- Bear Case (25x): ₹500
- Base Case (35x): ₹700
- Bull Case (45x): ₹900–₹950
Current price = fully priced in. Buy only if you’re drinking the “AI everywhere” Kool-AI-da.
6. 🍿 What’s Cooking – News, Triggers, Drama
- 🧠 Fixie.ai partnership → Voice AI platform
- 🏙️ New offices in Chicago & Canary Wharf (UK) → 25% hiring CAGR target
- 🏆 Won Sustainable Org of the Year + World HRD Congress awards
- 🚫 Terminated 7 employees for fraud (April 2025)
- 🔁 Resignation of senior management
- 📈 IPO oversubscribed 15x; Carlyle exits in tranches
AI + Awards = ₹900? Let’s see.
7. 📉 Balance Sheet – How Much Debt, How Many Dreams?
| Item | FY22 | FY23 | FY24 |
|---|---|---|---|
| Equity | ₹60 Cr | ₹61 Cr | ₹61 Cr |
| Reserves | ₹4,063 Cr | ₹4,574 Cr | ₹5,296 Cr |
| Borrowings | ₹456 Cr | ₹394 Cr | ₹574 Cr |
| Total Assets | ₹6,514 Cr | ₹7,202 Cr | ₹8,994 Cr |
🧾 D/E ratio still low (under 0.1)
Cash + reserves give it room to spend on hiring, offices, and awards.
8. 💵 Cash Flow – Sab Number Game Hai
| Metric | FY23 | FY24 |
|---|---|---|
| CFO | ₹1,516 Cr | ₹1,548 Cr |
| Capex | ₹284 Cr | ₹663 Cr |
| FCF | ~₹885 Cr | |
| Financing Outflows | ₹750 Cr | Carlyle exit + dividends |
🔥 Strong CFO = good sign
⚠️ But capex rising = expansion mode, so cash reserves may thin soon
9. 📐 Ratios – Sexy or Stressy?
| Ratio | Value | Comment |
|---|---|---|
| ROE | 23.3% | Solid |
| ROCE | 29.5% | Impressive |
| OPM | 15% | Still maturing |
| D/E | <0.1 | Lean |
| Working Capital Days | -6 | Efficient ops |
| Debtor Days | 60 | Under control |
| Payout | 45% | Balanced |
10. 🧾 P&L Breakdown – Show Me the Money
- FY24 Revenue: ₹11,974 Cr
- Application + Infra + Cloud: 60%+
- AI/Analytics: ~10% (rapidly growing)
- Europe & US: 80%+ revenue
- FY24 PAT: ₹1,174 Cr
- FY25 EPS est: ₹20–22
Steady, recurring. No crazy spikes. No dramatic vertical concentration risk.
11. 🥊 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | FY24 PAT | FY24 Sales | Comment |
|---|---|---|---|---|---|---|
| TCS | 25x | 52% | 26.4% | ₹48,519 Cr | ₹2.55L Cr | Daddy |
| Infosys | 25.6x | 28.8% | 24% | ₹26,516 Cr | ₹1.63L Cr | OG mid-margin |
| HCLTech | 26x | 25.2% | 22% | ₹17,399 Cr | ₹1.17L Cr | Dividend king |
| Persistent | 66x | 24% | 17.2% | ₹1,357 Cr | ₹12K Cr | Hot potato |
| Hexaware | 46.6x | 23.3% | 15% | ₹1,174 Cr | ₹11,974 Cr | Hot but rational? |
| LTIMindtree | 34x | 21.5% | 17% | ₹4,598 Cr | ₹38K Cr | Scale play |
👀 Valuation closer to Persistent, margin closer to Wipro. Bit of an identity crisis.
12. 🧑💼 Miscellaneous – Shareholding, Promoters
- Promoter: 74.71% (Carlyle)
- FIIs: 10.6% (up from 2.9% pre-IPO)
- DIIs: 9.1%
- Retail: ~5.7%
- Shareholders: 1.2 lakh
- 🧯 IPO raised ₹8,750 Cr for partial exit, expansion, and rewards budget for the HR team apparently.
13. 🧑⚖️ EduInvesting Verdict™
Hexaware is that LinkedIn influencer who’s everywhere.
Voice AI, Fixie, Canary Wharf, Chicago, HR awards, ESG medals — everything except a 20% margin.
✅ Financially sound
✅ Solid ROE, FCF, growth
❌ But P/E 46? With mid-teen margins?
Carlyle saw value at ₹475, exited partially at ₹890.
You decide who the smart money is.
🎯 FV Range: ₹700–₹950
- ₹700 = Fair for 20x FY25E EPS
- ₹950 = Upper limit of AI optimism
- ₹1,100+ = “You’re the exit liquidity” zone
✍️ Written by Prashant | 📅 July 10, 2025
Tags: Hexaware Technologies, AI Stocks India, Midcap IT, Carlyle IPO, Voice AI India, Persistent vs Hexaware, IT Sector Valuations, HEXT Stock, EduInvesting AI Tracker
