Hexaware Tech In Focus As Jefferies Initiates Coverage With ‘Buy’ Rating: Check Target Price

Jefferies has initiated coverage on Hexaware Technologies Ltd. with a ‘Buy’ rating and set a target price of Rs 930 per share. The brokerage projects that Hexaware will achieve a 10% compound annual growth rate in constant currency revenues and a 15% CAGR in earnings per share (EPS) over the calendar year 2025 to 2027.

The growth trajectory, the brokerage argues, is driven by Hexaware's diversified revenue mix, strong client addition, and a platform-led approach to legacy modernisation. "Hexaware offers a growth characteristic of a mid-sized IT firms with quality metrics rivaling large IT firms," the Jefferies report states. "Its balanced vertical mix, focus on quality client additions, and strong client mining track record position it to grow faster than the sector"

The report underscores Hexaware's diversified operations, with 74% of its sales coming from North America and 37% from the Banking and Financial Services (BFS) sector. Unlike many peers, Hexaware's revenue is spread across four service lines and six industry verticals, reducing dependency on any single segment. "When compared to other mid-sized IT firms, Hexaware's revenue mix is more diversified across verticals as well as client", Jefferies noted.

The brokerage expects Hexaware’s growth to moderate to 7% in 2025 due to weak macro conditions and client-specific pressures but anticipate a rebound to a 10% CAGR over 2025-2027, making it the third-highest growth rate in the industry.

This optimism is fueled by Hexaware’s strategic focus on expanding its geographic reach, scaling its Hi-Tech vertical, and leveraging its Global Capability Centers (GCC) practice. “Hexaware’s platform-led approach to legacy modernisation, expansion in geographic reach, and scale-up of the GCC practice will drive its outperformance,” the report added.