Brokerage firms Jefferies and Kotak Institutional Equities have cut their target prices on Hexaware Technologies after the IT services company withdrew its CY26 revenue growth guidance and lowered its operating margin outlook, citing delayed large-deal ramp-ups and near-term business challenges.
Jefferies maintained its ‘Underperform' rating on Hexaware Technologies but lowered its target price to Rs 470 from Rs 500, implying limited upside from current levels. The brokerage cut its revenue and earnings estimates by 2–3% following the company's weaker-than-expected September quarter performance and subdued growth outlook.
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Hexaware reported September 2026 quarter revenue of $412 million, rising 1.7% sequentially in constant currency terms, significantly below Jefferies' estimates. Normalised EBIT margin stood at 13.6%, down 10 basis points sequentially.
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Jefferies expects the company's organic revenue to grow at around 5% CAGR over CY25–28. It also flagged a potential 100-basis-point margin headwind in the December quarter due to wage hikes effective October 1 and seasonal weakness.
The brokerage believes Hexaware's current one-year forward price-to-earnings multiple of around 20 times may not sustain amid weakening growth prospects. It values the stock at 16 times earnings.
Meanwhile, Kotak Institutional Equities maintained its ‘Buy' rating but reduced its fair value estimate to Rs 620 from Rs 660. The brokerage highlighted the withdrawal of CY26 revenue growth guidance and expects sequential revenue decline in the December quarter.
Kotak also cut its CY27–28 earnings per share estimates by 6.5–7% and flagged the reduction in EBIT margin guidance to 13–13.5% for CY26.
The appointment of new CEO Vivek Jetley could be important for the company's next growth phase. Brokerages expect his priorities to include improving large-deal conversion, strengthening sales execution and driving margin improvement.
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