⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
HEXT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | HEXT | Market Cap | 26,419 Cr. | Current Price | 432 ₹ | High / Low | 900 ₹ |
| Stock P/E | 31.0 | Book Value | 53.3 ₹ | Dividend Yield | 2.66 % | ROCE | 33.4 % |
| ROE | 26.6 % | Face Value | 1.00 ₹ | DMA 50 | 558 ₹ | DMA 200 | 654 ₹ |
| Chg in FII Hold | -0.16 % | Chg in DII Hold | 0.18 % | PAT Qtr | 142 Cr. | PAT Prev Qtr | 271 Cr. |
| RSI | 32.6 | MACD | -50.1 | Volume | 32,45,692 | Avg Vol 1Wk | 16,35,909 |
| Low price | 400 ₹ | High price | 900 ₹ | PEG Ratio | 4.16 | Debt to equity | 0.13 |
| 52w Index | 6.35 % | Qtr Profit Var | -27.7 % | EPS | 12.8 ₹ | Industry PE | 20.9 |
📊 Core Financials
- Quarterly PAT dropped from ₹271 Cr. to ₹142 Cr. (~48% sequential decline, ~27.7% YoY fall).
- ROE: 26.6% → strong profitability despite earnings volatility.
- ROCE: 33.4% → excellent capital efficiency.
- Debt-to-equity: 0.13 → low leverage, financially stable.
- Dividend Yield: 2.66% → attractive shareholder returns.
💹 Valuation Indicators
- P/E Ratio: 31.0 vs Industry PE 20.9 → trading at a premium.
- P/B Ratio: 8.1 (Current Price ₹432 / Book Value ₹53.3) → expensive relative to assets.
- PEG Ratio: 4.16 → valuation stretched compared to earnings growth.
- Intrinsic Value: Current price above fair value, limited upside potential.
🏢 Business Model & Competitive Advantage
- Hexaware Technologies (HEXT) operates in IT services, digital transformation, cloud, and automation.
- Revenue model based on outsourcing contracts and digital-first solutions.
- Competitive advantage: Strong ROE/ROCE, niche focus on automation and cloud services.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹400–₹420 (close to 52-week low, RSI at 32.6 indicates oversold).
- Long-Term Holding: Suitable for investors seeking IT services exposure, but caution advised due to earnings volatility.
✅ Positive
- Strong ROE (26.6%) and ROCE (33.4%) show efficient capital use.
- Low debt-to-equity ratio (0.13) ensures financial stability.
- Dividend yield of 2.66% provides attractive shareholder returns.
⚠️ Limitation
- High P/E ratio (31.0) compared to industry average.
- PEG ratio (4.16) suggests valuation stretched relative to growth.
- FII holdings decreased (-0.16%), showing reduced foreign investor confidence.
📉 Company Negative News
- Quarterly PAT dropped sharply (~48% sequential decline).
- Stock trading below 50 DMA (₹558) and 200 DMA (₹654), indicating bearish momentum.
- MACD at -50.1 signals weak technical trend.
📈 Company Positive News
- DII holdings increased (+0.18%), reflecting domestic institutional support.
- Strong dividend payout supports long-term investors.
🌐 Industry
- IT services industry PE at 20.9, lower than HEXT’s 31.0, showing sector-wide undervaluation compared to HEXT.
- Industry growth driven by digital transformation, AI adoption, and cloud migration.
🔎 Conclusion
- HEXT is fundamentally strong with high ROE/ROCE and low debt, but recent earnings weakness raises concerns.
- Valuations are stretched, limiting near-term upside.
- Best strategy: Accumulate cautiously near ₹400–₹420 and hold long-term for exposure to IT services growth, while monitoring earnings stability.