💰 Financial Performance

Revenue Growth by Segment

Financial Services grew 12.2% YoY (29.7% of revenue); Healthcare and Insurance grew 9.4% YoY (22.3% of revenue); Manufacturing and Consumer grew 8.0% YoY (16.2% of revenue); Banking grew 9.9% YoY (8.7% of revenue); High Tech and Professional Services declined 10.1% YoY (15.3% of revenue); Travel and Transportation declined 2.5% YoY (7.8% of revenue).

Geographic Revenue Split

Americas contributes 75.6% (up 8.4% YoY); Europe contributes 18.9% (down 0.7% YoY); Asia Pacific contributes 5.5% (down 8.4% YoY).

Profitability Margins

Reported Profit Margin was 10.6% in Q3CY25, a decrease of 103 bps QoQ but an improvement of 106 bps YoY. EBIT Margin stood at 15.0%, flat QoQ but up 134 bps YoY.

EBITDA Margin

EBITDA Margin was 17.6% in Q3CY25, expanding 154 bps YoY and 25 bps QoQ. Absolute EBITDA reached INR 611.6 Cr, a 21.8% increase YoY.

Capital Expenditure

Capital expenditure for 9MCY25 was INR 129.6 Cr, compared to INR 88.6 Cr in 9MCY24, representing a 46.3% increase to support infrastructure and growth.

Credit Rating & Borrowing

Finance costs for Q3CY25 were INR 26.0 Cr, up 15.0% YoY. Total borrowings and lease payments for 9MCY25 amounted to INR 138.9 Cr.

⚙️ Operational Drivers

Raw Materials

Human Capital/Employee Benefit Expenses represent 56.9% of total revenue; Software License Costs represent approximately 2% of revenue.

Import Sources

Primary talent sourcing is from India (Offshore) and the United States (Onshore).

Key Suppliers

Not disclosed in available documents; however, the company utilizes third-party software vendors for license-based revenue segments.

Capacity Expansion

Current headcount is 33,590 employees as of Q3CY25, with a net addition of 1,180 professionals in the quarter (750 in IT, 413 in BPS).

Raw Material Costs

Employee benefit expenses were INR 1,983.5 Cr in Q3CY25, up 9.6% YoY, driven by a ninth straight quarter of headcount additions and wage management.

Manufacturing Efficiency

IT Business Professional utilization rate was 83.8% in Q3CY25, showing consistent efficiency above the 83% threshold.

Logistics & Distribution

Not applicable; service delivery is digital and via onshore/offshore professional deployment.

📈 Strategic Growth

Expected Growth Rate

11.1%

Growth Strategy

Growth is driven by a 'consolidation deal' strategy, having won a large deal with a Top 3 Canadian Bank. The company is expanding its High-Tech vertical under new leadership and integrating the SMC acquisition ($66M EV) to penetrate the GCC and marketing analytics space. Management expects CY26 to outperform CY25 through volume growth and increased offshore delivery.

Products & Services

Digital ITO Services, Service Now implementations, Generative AI Strategy and Consulting, Managed End-user Technology, BPS Services, and Product Engineering.

Brand Portfolio

Hexaware Technologies, SMC (Soft-Link International).

New Products/Services

Generative AI Strategy and Consulting services; Marketing Analytics via the SMC acquisition.

Market Expansion

Expansion into the Canadian banking sector and strengthening presence in the US Mid-Market for Future of Work services.

Market Share & Ranking

Recognized as a 'Leader' in ISG Provider Lens for Generative AI Strategy (Midsize) and Managed End-user Technology (Mid Market).

Strategic Alliances

Partnerships with ISG for Digital Case Studies and Gartner for IT service evaluations.

🌍 External Factors

Industry Trends

The industry is shifting toward Generative AI and GCC (Global Capability Center) models. Hexaware is positioning itself as a leader in mid-market AI strategy to capture this 5-10% growth trend.

Competitive Landscape

Competes with global IT majors and mid-tier firms; differentiates through 'fastest growing' status and specialized ISG/Gartner recognitions.

Competitive Moat

Moat is built on high switching costs in Digital ITO and specialized domain expertise in Financial Services (29.7% of revenue). Sustainability is supported by a 79.6% cash conversion rate.

Macro Economic Sensitivity

Highly sensitive to US and European enterprise IT budgets; budget cuts in Q1 impacted the High Tech vertical growth trajectory.

Consumer Behavior

Enterprise clients are shifting from discretionary spending to cost-consolidation deals and AI-driven efficiency projects.

Geopolitical Risks

Visa transfer restrictions and immigration policy changes impact the ability to deploy staff onshore in the US.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with SEBI (Depositories and Participants) Regulations 2018 and international data privacy standards for healthcare (H&I vertical).

Taxation Policy Impact

Effective Tax Rate (ETR) was 25.5% in Q3CY25, compared to 26.2% in Q3CY24.

Legal Contingencies

The company notes the existence of litigations in its safe harbor statement, but specific case values in INR are not disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

Vertical-specific budget volatility (HTPS down 10.1%) and the dilutive impact of acquisition accounting on EPS.

Geographic Concentration Risk

High concentration in the Americas (75.6% of revenue), making the company vulnerable to US economic cycles.

Third Party Dependencies

Dependency on software vendors for license revenue, which impacted margins by 70 bps in the current quarter.

Technology Obsolescence Risk

Risk of traditional IT services being disrupted by AI; mitigated by 'Leader' ranking in Generative AI services.

Credit & Counterparty Risk

Receivables quality is stable with a DSO of 73 days; one client in Professional Services slid from Top 10 to 10-20 bracket, indicating potential credit/revenue risk.