Shares of Hexaware Technologies Ltd slumped 7.13% to ₹767.65 on Friday after the company reported weaker-than-expected Q2CY25 earnings. The decline of ₹58.95 from the previous close of ₹826.60 wiped out substantial investor wealth, dragging the company’s market capitalization to ₹470.95 billion.
The company’s revenue growth in constant currency terms stood at just 1.3%, below analyst expectations of 2.5%. A major factor behind the poor performance was a sharp rise in other expenses, which spiked to ₹142 crore from just ₹8.7 crore in the same quarter last year. This included one-off charges such as customer-related provisions of ₹78.2 crore, ERP transformation cost of ₹12 crore, acquisition costs of ₹12.8 crore, and impairment of a customer contract worth ₹39.4 crore.
As a result, EBITDA dropped to ₹404 crore from ₹431 crore in Q2CY24 and ₹527.8 crore in the March quarter. EBITDA margins shrank significantly to 12.4%, down from 14.7% last year and 16.5% last quarter. Although the company said that adjusted for one-offs, EBITDA margins would have stood at 18.1%, it has maintained its full-year margin guidance between 17.1% and 17.4%.
On the outlook front, while small and mid-sized deals continue to progress, Hexaware acknowledged that decision-making on large consolidation deals is delayed, and expectations for the rest of the year remain subdued.
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