Hexaware Technologies Limited IPO

The company delivers its services through advanced AI-powered platforms, including RapidX for digital transformation, Tensai for automation, and Amaze for cloud adoption.

Hexaware caters to a diverse client base, including 31 companies from the Fortune 500 list.

The company collaborates with key industry partners such as ServiceNow, which provides AI-driven solutions for HR, IT, customer service, security, and finance, and Backbase, a Netherlands-based fintech firm specializing in banking solutions.

Hexaware operates in multiple regions, including the Americas, Europe, and APAC, covering the Middle East, Africa, and Latin America. It serves various industries such as financial services, healthcare and insurance, manufacturing, consumer goods, hi-tech, professional services, banking, and travel and transportation.

The company focuses on expanding its customer base in the Americas, Europe, and APAC through a structured go-to-market strategy. This involves efforts from its New Customer Acquisition, Account Management, Hybrid Sales, and Overlay Sales teams.

The company states that it has a strong global presence with the help of its talent pool and a balanced onshore-offshore delivery model. As of September 30, 2024, the company had 39 delivery centers and 16 offices in 28 countries. This helps the company deliver cost-effective and flexible solutions.

The company has seen a consistent increase in the revenue from operations and profit after tax (PAT) over the years. Revenue from operations increased from Rs 7,177.7 crore in FY21 to Rs 9,199.6 crore in FY22 to Rs 10,380.3 crore in FY23. PAT increased from Rs 748.8 crore in FY21 to Rs 884.2 crore in FY22 to Rs 997.6 crore in FY23.

The company generates most of its revenue from America and Europe. America contributed Rs 6,471.1 crore (73.4%) for the nine months ending September 30, 2024, and Rs 7,419.1 crore (71.5%), Rs 6,719.2 crore (73.0%), and Rs 5,032.9 crore (70.1%) in FY23, FY22, and FY21, respectively to the revenue from operations. Europe accounted for Rs 1,805.8 crore (20.5%) for the nine months ending September 30, 2024, and Rs 2,289.7 crore (22.1%), Rs 1,866.9 crore (20.3%), and Rs 1,473.5 crore (20.5%) in FY23, FY22, and FY21, respectively to the revenue from operations. Any adverse developments or economic downturns in these regions could adversely impact business performance.

A large portion of the company's revenue comes from customers in financial services and healthcare & insurance. Financial services contributed Rs 2,494.9 crore (28.3%) for the nine months ending September 30, 2024, and Rs 2,826.4 crore (27.2%), Rs 2,661.7 crore (28.9%), and Rs 2,120.4 crore (29.5%) in FY23, FY22, and FY21, respectively to the revenue from operations. Healthcare & insurance accounted for Rs 1,869.6 crore (21.2%) for the same period and Rs 2,251.6 crore (21.7%), Rs 2,079.5 crore (22.6%), and Rs 1,547.8 crore (21.6%) in FY23, FY22, and FY21, respectively to the revenue from operations. Any sudden changes in these sectors or a reduction in revenue generated by these sectors could negatively impact the company’s financial performance.

A major portion of revenue comes from a limited number of key customers. The top 10 customers contributed 35.7% of revenue for the twelve months ending September 30, 2024, and 35.5%, 36.6%, and 38.4% in FY23, FY22, and FY21, respectively to the revenue from operations. Since the company is not an exclusive IT service provider for these clients, the company may lose them, and any loss of these key customers or a decrease in business from them could harm financial stability.

The company is exposed to cyber threats, including cyber-attacks, ransomware, computer viruses, and electronic breaches. Such incidents could disrupt operations and negatively impact financial performance.

The company, its subsidiaries, and directors are involved in certain ongoing legal proceedings. Any adverse judgments in any of these cases could be detrimental to the company’s business prospects.