Will Hexaware Technologies Sustain Its Margin Expansion and Large Deal Momentum in FY26?
About Hexaware Technologies
Hexaware Technologies is a global IT services and consulting firm specializing in cloud transformation, data modernization, digital engineering, and automation-led operations. The company is backed by Carlyle Group and focuses on driving cost-efficient digital transformation solutions for clients across banking, insurance, and manufacturing sectors.
Q2 FY26 demonstrated continued operational discipline, improved utilization, and incremental margin gains supported by a stronger offshore mix and higher efficiency across delivery centers.
Financial Highlights (Q2 FY26)
| Metric | Performance | YoY | QoQ |
|---|---|---|---|
| Revenue (USD) | +5.5% | Growth | +3.3% |
| EBITDA Margin | 17.5% | +30 bps | +30 bps |
| YTD Margin | 17.2% | Stable | In line |
| Cash Balance | $228 Mn | Strong | Post Acquisition |
| DSO | 73 days | Best-in-Class | Steady |
| Headcount Additions | +1,180 | New Hires | Utilization 83.5% |
| Attrition | 11–11.5% | Low | Stable |
| Offshore Mix | 49% | ↑ 220 bps | Sequential |
Revenue growth of 5.5% YoY was driven by digital transformation projects and the inclusion of SMC’s portfolio.
EBITDA margin at 17.5% remained within the guided range supported by FX gains and operational efficiency.
Cash balance of $228 Mn provides sufficient headroom for strategic acquisitions and organic expansion.
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Peer Comparison
| Company | Segment Focus | EBITDA Margin |
|---|---|---|
| Hexaware Technologies | Digital & Cloud | 17.5% |
| LTIMindtree | IT Services | 16.8% |
| Mphasis | BFSI & Cloud | 15.9% |
Hexaware’s efficiency and offshore mix advantage continue to deliver industry-leading margins among mid-tier IT peers.
Strengths & Weaknesses
Strengths
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Weaknesses
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While near-term costs persist, operational leverage and efficiency gains offset most pressures.
Opportunities & Threats
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Deal finalizations in Q4 and SMC integration synergies are likely to boost growth trajectory into FY26.
Valuation & Investment View
- Short-term: Supported by strong Q4 deal closures and pipeline conversion.
- Medium-term: Margins to expand from efficiency and offshore shift.
- Long-term: Sustained growth visibility from digital transformation and BFSI demand.
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Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, notes that Hexaware’s robust deal momentum, strong balance sheet, and rising offshore mix reinforce its medium-term growth visibility. Explore more such insights at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on IT Stocks
- How will Hexaware’s SMC integration impact FY26 growth?
- Which IT midcaps are seeing strong digital deal wins?
- Will higher offshore mix drive margin expansion?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
