Hexaware net up 35 per cent

CORPORATE SCORECARD

Hexaware Technologies net profit for the first quarter ended March 31, 2007, stood at Rs 35.19 crore, up 35.2 per cent compared with Rs 26.02 crore for the same period last year. Its revenues for the financial year increased 50.1 per cent to Rs 264.36 crore (Rs 176.15 crore).

For the first quarter 2007 the company's sequential net profit increased 4.3 per cent from Rs 33.75 crore in the fourth quarter of 2006. Its revenues grew by 10.1 per cent from Rs 240.21 crore.

The company's offshore billing rates were up by 1.5 per cent. In its guidance for the quarter ended June 30, 2007, the company said revenues would be in the range of Rs 268.8 crore ($64-65 million), registering a growth of 6.5 to 8.1 per cent over Q1 2007.

Net profit is expected to be in the range of Rs 29.4-30.2 crore ($7-7.2 million) at an exchange rate assumption of Rs 42 per dollar. This includes the impact of the proposed annual salary increase of 14-15 per cent for offshore and 4-5 per cent for onsite workers.

"Our revenues and profits continue to grow consistently with our medium-term business plan. For the past quarter, notwithstanding the adverse impact of 1.6 per cent appreciation of the rupee on a quarter-on-quarter basis, operational metrics continue to show healthy improvement. However, the appreciation of the rupee will impact our future margins," commented Atul Nishar, executive chairman, Hexaware Technologies.

The quarter witnessed an addition of 20 new clients. Of these, 12 were from North America, two from Europe, four from APAC region and two for Caliber Point.

Based on business competence, eight new clients were added in testing, four in ERP, two in business intelligence (BI) and business analytics (BA), three in application management, two in BPO and one in product engineering space. The total number of active clients is 151.

Hexaware's strategy to focus on high potential clients in order to maximize opportunities has resulted in a sharp increase in the number of million dollar clients.

The number of clients registering more than $1 million increased from 41 to 46, four were in the $5-10 million range while another five billed more than $10 million each (all on a trailing 12 months basis).

The company's total headcount remains at 5,751, the utilisation of employees increased to 70.7 per cent from 68.2 per cent. The attrition rate increased marginally to 16.1 per cent on an annualised basis.

This is the first quarter with full consolidation of FocusFrame metrics. Since larger share of FocusFrame revenues are derived from onsite locations, the consolidated profitability ratios were impacted.