Nuvama Institutional Equities has initiated coverage on Hexaware Technologies with a ‘Buy’ rating. The brokerage has a target price of Rs 950 on the stock, implying an upside of 26.5% for the Hexaware share price. They are valuing the stock at a PE of 30x for FY27.
Nuvama on Hexaware Technologies: In a sweet spot
Hexaware Tech, with a top line of $1.4 billion and a market cap of Rs 43,800 crore, is part of the mid-cap IT universe, which the brokerage expects shall continue to outgrow and outperform large-cap peers.
Nuvama said that it envisages solid growth over the next few years, driven by a revenue base in a ‘sweet spot’, coveted clientele, strong presence across verticals and service lines, and a robust cash flow profile.
Hexaware Tech has a large revenue base and an employee base of 32k, leaving ample space for growth while, at the same time, not allowing the large base to drag growth. “The company has always had strong capabilities. Its bigger size today ($1–5 billion zone) enables it to chase the bulk of large deals, providing the best-of-both-world benefits,” said Nuvama.
Nuvama on Hexaware Technologies: Recent correction good entry opportunity
Nuvama said that the recent correction in the wake of soft Q2 CY25 results and commentary has slotted Hexaware Tech perfectly between two buckets of high-growth-but-expensive (Coforge and Persistent) and inexpensive-but-low-growth (Top-5) IT stocks.
The company shall tide over near-term headwinds as the macro environment improves. According to Nuvama, the current market price offers an excellent opportunity to own a high-quality business at an inexpensive valuation.
“Over CY24–CY27, we reckon Hexaware shall report a revenue CAGR of 11% (USD); alongside, margin expansion of 250 basis points shall propel EBIT CAGR of 19% and EPS CAGR of 18%,” said Nuvama.
Hexaware Tech is trading at a PE of 28x for CY26 and 24x for CY27, which is in line with mid-cap peers LTIMindtree and Mphasis.
Hexaware Technologies share performance
The share price of Hexaware Technologies has risen 10% in the last five trading sessions. The stock has fallen 6% in the past one month and 1.5% in the last six months. However, Hexaware Technologies’ share price has given a return of 6% in the last one year.