Hexaware Technologies : Double-digit growth despite client issues; exhibits strong underlying momentum
Strong underlying momentum: Revenue growth of 1.4% QoQ was ahead of our estimate of -1%, which had baked in ramp-down of one of its top customers. Growth of 12.4% YoY, despite these headwinds, is a testimony to the underlying strength in the business ??? fuel led by the same bits: Europe and APAC among geographies, and ADM, BPS and IMS among services. Conservative guidance: Despite the residual impact of ramp-downs (spread equally over CY17 and CY18), HEXW guided for 10-12% revenue growth for CY18 ??? compared to 15.7% delivered in CY17. This implies a CQGR of 3% in CY18, the same that was delivered in the previous year, despite a neat uptick in deal wins from new customers at USD72m, breaking the average of ~USD40m per quarter and taking the total for the year to USD180m (+19% YoY). Comments around the guidance indicated conservatism ??? to avoid a downward revision in the future. We are baking in 12.5% revenue growth, a notch higher than indicated