Hold Hexaware Technologies: target of Rs 550: ICICI Securities

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Hexaware's revenue growth has trailed management's expectations due to delays and reduced spending from large clients, as well as industry headwinds such as AI deflation and weak macro.
  • The company's new CEO, Mr. Jetley, is expected to drive growth through AI-led initiatives, with a focus on data and AI-led transformation.
  • Hexaware's AI strategy is structured around three pillars: AI for IT, AI for Business, and AI Foundation, with a focus on delivering cost savings and operational efficiencies to clients.
  • The company has expanded its partnership with Anthropic to become a Preferred Partner in the Claude Partner Network, providing early visibility into Anthropic's roadmap and access to start-up kits.

Thesis Validation Checklist

  • Investors should watch for signs of improvement in revenue growth, particularly in the areas of AI for Business and AI Foundation.
  • The success of the new CEO's playbook and the company's ability to drive growth through AI-led initiatives will be key to validating the investment thesis.
  • Industry trends, such as the adoption of AI and digital transformation, will also be important to monitor.
  • The company's ability to manage its onshore-offshore mix and improve its EBIT margins will be crucial to delivering long-term growth and profitability.