Hexaware Technologies share price slips 6% after weak Q1; exceptional costs hit margins

Market performance

• Hexaware Technologies share price fell ~6% to ₹779 in early trade on July 25.
• At 9:25 am, the Hexaware Technologies share price was ₹782, down 5.3% on the NSE.
• Despite today’s fall, the Hexaware Technologies share price is up over 20% in the last three months.

Main news: Muted Q1 as one‑offs spike costs

Hexaware, which follows a calendar-year reporting format, posted a muted April–June 2025 quarter as exceptional items dragged profitability.

What hurt the quarter?

Other expenses jumped to ₹142 crore (vs ₹8.7 crore YoY), comprising:

• ₹78.2 crore: customer-related provisions
• ₹12 crore: ERP transformation costs
• ₹12.8 crore: acquisition-related expenses
• ₹39.4 crore: impairment tied to a customer contract from an earlier acquisition

Operating performance

• Revenue (constant currency): +1.3%
• EBITDA: ₹404 crore (vs ₹431 crore YoY; ₹527.8 crore in the March quarter)
• EBITDA margin: 12.4% (vs 16.5% in the previous quarter; 14.7% YoY)
• Adjusted EBITDA margin (ex one-offs): 18.1% (vs 17% in the March quarter)

Large deal closures are stuck in prolonged decision cycles, while smaller and mid-sized deals continue to progress.

Financial snapshot (Q1 CY2025)

Revenue (CC growth): +1.3%

Other expenses: ₹142 crore (₹8.7 crore YoY)

• ₹78.2 crore – customer-related provisions
• ₹12 crore – ERP transformation
• ₹12.8 crore – acquisition-related costs
• ₹39.4 crore – impairment on earlier acquired customer contract

EBITDA: ₹404 crore

• ₹431 crore a year ago
• ₹527.8 crore in March quarter

EBITDA margin: 12.4%

• 16.5% in the previous quarter
• 14.7% a year ago

Adjusted EBITDA margin: 18.1%

• 17% in the March quarter

Company details & recent listing history

• Hexaware Technologies relisted after four years and closed 7% higher on debut (February 19).
• The IPO was a pure offer-for-sale by CA Magnum Holdings (Carlyle’s investment holding company).
• Hexaware did not receive IPO proceeds; the selling shareholder pocketed the entire public issue amount.

Summary

• The Hexaware Technologies share price dropped after a weak Q1 CY2025, primarily due to sharp one-time costs.
• Margins compressed to 12.4%, though adjusted margins improved to 18.1% once exceptional items were stripped out.
• Large deals remain delayed, adding pressure on near-term momentum.
• The Hexaware Technologies share price still shows strong three-month gains (~20%), even after today’s decline.