HEXT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | HEXT | Market Cap | 27,352 Cr. | Current Price | 448 ₹ | High / Low | 900 ₹ |
| Stock P/E | 32.1 | Book Value | 53.3 ₹ | Dividend Yield | 2.57 % | ROCE | 33.5 % |
| ROE | 26.6 % | Face Value | 1.00 ₹ | DMA 50 | 493 ₹ | DMA 200 | 608 ₹ |
| Chg in FII Hold | -3.95 % | Chg in DII Hold | 3.73 % | PAT Qtr | 142 Cr. | PAT Prev Qtr | 271 Cr. |
| RSI | 42.3 | MACD | -5.20 | Volume | 2,15,119 | Avg Vol 1Wk | 2,25,432 |
| Low price | 400 ₹ | High price | 900 ₹ | PEG Ratio | 4.32 | Debt to equity | 0.13 |
| 52w Index | 9.49 % | Qtr Profit Var | -27.7 % | EPS | 12.8 ₹ | Industry PE | 21.6 |
Positive
- Strong ROE (26.6%) and ROCE (33.5%) highlight efficient capital use.
- Dividend yield of 2.57% provides steady income.
- Low debt-to-equity ratio (0.13) ensures financial stability.
- EPS of ₹12.8 reflects consistent profitability.
- DII holdings increased (+3.73%), showing domestic institutional confidence.
Limitation
- P/E ratio of 32.1 is significantly higher than industry average (21.6), suggesting overvaluation.
- PEG ratio of 4.32 indicates stretched valuation relative to growth.
- Current price (₹448) below 50 DMA (₹493) and 200 DMA (₹608), reflecting weak technical sentiment.
- RSI at 42.3 and MACD (-5.20) show bearish momentum.
- Quarterly PAT declined from ₹271 Cr. to ₹142 Cr. (-27.7%), raising concerns about earnings sustainability.
Company Negative News
- Decline in FII holdings (-3.95%) signals reduced foreign investor confidence.
- Profit contraction impacts near-term sentiment.
Company Positive News
- DII stake increased (+3.73%), reflecting domestic support.
- Strong ROE and ROCE continue to support long-term fundamentals.
- Dividend yield remains attractive for income-focused investors.
Industry
- IT services sector trading at industry P/E of 21.6, lower than HEXT’s premium valuation.
- Sector faces margin pressures and global demand moderation.
- HEXT’s competitive advantage lies in niche IT services and strong efficiency metrics, though growth is slowing.
Conclusion
HEXT shows strong efficiency and dividend yield but faces valuation concerns, declining profits, and weak technicals.
Entry Zone: Safer accumulation range between ₹430–₹445 near support levels.
Long-Term Guidance: Suitable for cautious investors seeking dividend yield and efficiency, but expect moderate returns until earnings growth stabilizes and technical strength improves.
Would you like me to also prepare a peer benchmarking overlay (Infosys, TCS, Wipro) so you can see how HEXT stacks up against larger IT players in terms of valuation and efficiency?