Hexaware Shares Plunge 10% on Weak Q4 Results, Outlook Concerns

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AuthorAnanya Iyer|Published at:
Hexaware Shares Plunge 10% on Weak Q4 Results, Outlook Concerns
Overview

Hexaware Technologies saw its shares plummet nearly 10% after a disappointing fourth-quarter performance. Revenue declined sequentially, and margins missed expectations, raising concerns despite management's optimism about an improving demand environment and AI strategy. The company forecasts a weaker first quarter in 2026 before a second-half rebound.

Financial Performance Deep Dive

Shares of Hexaware Technologies fell nearly 10% on Thursday, February 5, following the company's weak operational report for the fourth quarter of calendar year 2025. Constant Currency (CC) revenue saw a sequential decline of 1.4%, aligning with market predictions. Dollar revenue slipped 1.5% quarter-on-quarter to $389 million, while rupee revenue contracted by 0.2% to ₹3,478.2 crore.

Forward Guidance and Sector Outlook

Looking ahead to 2026, Hexaware projects reported revenue growth exceeding the 7.6% achieved in 2025. However, the company guided for a CY26 EBIT margin range of 13%–14%. Management anticipates a dip in EBIT for the first quarter of 2026 compared to the preceding quarter, attributing this to seasonal factors and ramp-ups from rebadging deals. A stronger performance is expected in the latter half of the year. Banking and Healthcare & Insurance sectors are forecast to lead growth in 2026, followed by Financial Services and GTT.

AI Strategy and Headcount

Despite the near-term challenges, Hexaware's management expressed confidence in an improving demand environment and enhanced decision-making processes. The company secured all anticipated deals in Q4CY25, with one significant consolidation deal still in progress. Focusing on artificial intelligence, CEO R Srikrishna outlined a strategy to launch a new AI-enabled service monthly and deliver these innovations to key customers within 90 days. The firm's total headcount stood at 33,844 at year-end 2025, with a net addition of 1,535 employees. Voluntary IT attrition was reported at 11% on a trailing twelve-month basis. The stock is currently trading at ₹626.56, below its IPO price of ₹708.

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