Hexaware Technologies Ltd (HEXT) Q1 FY27 Results Analysis: Revenue Growth Re-Accelerates to 6.1%, PAT Declines 13%

Hexaware Technologies Ltd's Q1 FY27 numbers came in mixed, with revenue of Rs. 3,845.20 Cr (+17.90% YoY) and PAT growth of -13.00% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q2CY26 revenue growth re-accelerated to 6.1% USD YoY, with cost management delivering operating leverage. However, PAT declined 13% YoY due to FX losses and a higher tax rate, while working capital stretched. The strong dividend hike and management's claim of industry-leading growth signal confidence, but margin compression and cash conversion remain concerns.

Key Investment Insights

Key Positives

• Revenue grew 17.9% YoY to Rs.3,845.2 Cr, with USD growth accelerating to 6.1% YoY from prior ~4.6%.
• Constant-currency revenue growth of 6.3% YoY, re-accelerating from prior trajectory.
• Other expenses nearly flat YoY (+2.6%), yielding operating leverage.
• Interim dividend raised to Rs.8.50 per share from Rs.5.75 (47.8% increase).
• EBIT margin improved 68 bps QoQ to 13.62%, within the prior guidance band of 13.0-14.0%.

Risk Factors

• PAT declined 13.0% YoY to Rs.330.2 Cr, driven by FX losses of Rs.78.3 Cr and a higher effective tax rate (25.1% vs 18.9%).
• EBITDA margin compressed 160 bps YoY to 15.7% due to the swing in other income.
• Working capital stretched: DSO rose to 63.8 days from 55.9 days.
• Cash conversion weak: OCF/PAT ratio of 0.58x in H1CY26.
• Effective tax rate increased sharply to 25.1% from 18.9% YoY, impacting net income.