Hexaware Technologies, a global IT consulting firm, launched its IPO today, with subscriptions open until 14 February 2025. This INR 8,750 crore offer-for-sale by promoter CA Magnum Holdings is priced between INR 674 and INR 708 per share. Here’s a summary of Hexaware Technologies IPO recommendations by major brokerage houses. The company’s several brokerage houses have provided recommendations based on their analyses of its financial health and market potential. Read on for more.
Hexaware Technologies IPO Recommendations
BP Wealth – Subscribe
BP Wealth has recommended that investors with subscribing tolerance consider applying for the Hexaware Technologies IPO. “The issue is valued at a price-to-earnings (P/E) ratio of 43.1x on the upper price band based on CY23 earnings, which is relatively cheaper compared to its peers. Considering the above compelling factors, we recommend a “SUBSCRIBE” rating for this issue.”.
Canara Bank Securities – Subscribe for long term
“The company boasts exceptional employee retention, with the lowest attrition rate in the industry and a top Glassdoor rating, indicating strong employee satisfaction and stability. Additionally, its offshore mix is at 44%, below the industry average, presenting opportunities for cost optimization and margin improvement. With a utilization rate of 85%, there is further potential for operational efficiency and margin expansion. The company’s strong market position and operational strengths are clear, but the delisting concerns persist, even though its P/E of 43x as of CY23 is lower than its peers, offering potential for value appreciation. Hence, we recommend to SUBSCRIBE the issue for long-term gains.”
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Elite Wealth – Apply for a long term
“Hexaware Technologies Limited is one the global digital and technology Services Company focused on AI-driven innovation and digital transformation. According to the Brand Finance 100 2024 report, Hexaware was recognized as the ‘Fastest Growing Brand,’ advancing from 75th to 50th in the overall India rankings and from 9th to 7th among Indian IT firms. With strong financial performance and the industry poised for significant growth, the company presents promising opportunities. At the upper price band of Rs 708, the company has offered at a P/Ex of 36.4 based on its expected CY25 earnings. Keeping in mind the product profile and industry opportunity, we feel the company is expected to do better, but the price seems slightly on the higher side; thus, we advise Investors to only apply for a long-term point of view and buy from the secondary market.”
Arihant Capital – Subscribe for long term
Arihant Capital added another positive word in Hexaware Technologies IPO recommendations. “Hexaware Technologies is ranked in top 10 IT sector companies in India. Leveraging a strong global presence and networks in key markets in India, US and UK, the company continue to innovate in AI technologies. The company’s revenue has increased, with a focus on maintaining profitability through efficient execution and cost management. At the upper band of INR 708, the issue is valued at a P/E ratio of 37.82x, based on a annualized Sept 24 EPS of INR 18.72. We are recommending a “Subscribe for long term” for this issue.”
Anand Rathi – Subscribe
Analysts at Anand Rathi added further to the positive Hexaware Technologies IPO recommendations. “At the upper price band company is valuing at P/E of 43.1x with a market cap of ₹ 430,247 million post issue of equity shares and return on net worth of 22.8%. On the valuation front, we believe that the company is fairly priced. Thus, we recommend a “SUBSCRIBE” rating to the IPO.”
Samco Securities – Avoid
Samco Securities has issued a clear “Avoid” recommendation for the Hexaware Technologies IPO. “Hexaware Technologies Limited is one of the leading players in AI-enabled digital solutions provider from India. It marked steady growth in its top and bottom lines for the reported periods. However, the listed peers have reported better margins. Hexaware comes at an earnings valuation of 43x based on its earnings per share (EPS) as of December 31, 2023, and the upper price band. In comparison, its listed peers, such as Persistent Systems, Coforge, LTIMindtree, and Mphasis, exhibit PE ratios of 69x, 72x, 37x, and 32x respectively as of February 11, 2025. Considering the financials, valuation, and current market condition, we advise the investors to AVOID Hexaware Technologies Limited IPO.”
GEPL Capital – Avoid
- Hexaware Technologies achieved a modest financial growth with topline and bottom line increasing by 20% and 15% over the last two years driven by improved customer mix and a meaningful rise in number of customers above US$10 million.
- Over the next five years, the global enterprise technology is expected to grow at a CAGR of 7.3% and reaching a market size of Rs. 630.7 trillion driven by cloud computing, AI, data analytics, automation, and connected technologies .
- Based on the FY24 earnings relative to the company’s post-IPO paid-up equity capital, the issue is priced at a P/E ratio of 37.8x. We believe that the company is overly valued compared to its modest financial performance and some of its industry peers. Therefore, we recommend a “Avoid” rating for the issue.
Hexaware Technologies IPO Recommendations – Bottomline
In conclusion, brokerage houses are generally optimistic about the Hexaware Technologies IPO, recommending subscriptions based on varying risk appetites and investment horizons. While some firms advocate for long-term investments due to growth potential, others emphasize caution due to market volatility and company size considerations.
While Hexaware Technologies IPO analyst views are mostly positive, the informal or grey market is presenting confusing signals with a remarkable decline in premiums in recent days. This is not uncommon for the market to behave this way before large IPOs and Hexaware Technologies is going to make history with the biggest IPO in India. Nevertheless, investors are encouraged to assess their individual risk profiles and conduct thorough research before participating in this IPO.