www.hexaware.

com

Investor Update
Q3 2014

Hexaware Technologies. All rights reserved.

Safe harbor statement

Certain statements on this presentation concerning our future growth prospects are
forward-looking statements, which involve a number of risks, and uncertainties that could
cause actual results to differ materially from those in such forward-looking statements. The
risks and uncertainties relating to these statements include, but are not limited to, risks and
uncertainties regarding fluctuations in earnings, our ability to manage growth, intense
competition in IT services including those factors which may affect our cost advantage,
wage increases, our ability to attract and retain highly skilled professionals, time and cost
overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on
immigration, our ability to manage our international operations, reduced demand for
technology in our key focus areas, disruptions in telecommunication networks, our ability
to successfully complete and integrate potential acquisitions, liability for damages on our
service contracts, the success of the companies in which Hexaware has made strategic
investments, withdrawal of governmental fiscal incentives, political instability, legal
restrictions on raising capital or acquiring companies outside India, and unauthorized use
of our intellectual property and general economic conditions affecting our industry
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Business Update

Hexaware Technologies. All rights reserved.

Healthy broad-base revenue growth

Profitability metrics outgrow revenue
Profitability metrics:
Revenue: Healthy QoQ growth in Q3 2014

Margin expansion QoQ across the board:

Gross Margin, EBITDA Margin and PAT Margin
Gross Margin

115.0
110.0

40.0%

110.0

PAT
37.3%

36.2%

35.0%

7.1% CQGR
105.0

36.8%

EBITDA

30.0%

102.0

25.0%

100.0

20.0%

95.9

19.3%
16.6%

95.0

15.0%
90.0
Q1 2014

Q2 2014

Q3 2014

11.9%

12.5%

18.0%
12.8%

10.0%
Q1 2014

Q2 2014

Q3 2014

Focus is on improving sustainability of the performance

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Progress made in Client Size

Q3 2013

Q3 2014
1 client > $ 50 m+
1 client > $ 30 m+

$ 20+
$10 - $20
$5 - $10
$1 - $5
> $1

11

37

42

53

61

Last twelve months revenue in US$ million

Hexaware Technologies. All rights reserved. | www.hexaware.com

Consistent Return on Equity

Return on Equity (RoE)
29%
28%

28%
27%
26%

26%
25%
24%

24%

23%
22%
21%
20%
Q1 2014

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Q2 2014

Q3 2014

Shareholder Metrics
Dividend Payout: well above industry

Total Shareholder Returns:

2014 includes the interim dividend of the first three

quarters alone [ ` 3.00 + ` 1.60 + ` 2.35 = ` 6.95]

Stock price as at the end of each quarter end in 2014

Share Price Movement in 2014

Dividend declared for the year
12.00

220.0
201.2

11.10
200.0

10.00
180.0
8.00

6.95

6.00

158.3
160.0

5.40
4.00

150.5

140.0

4.00

131.9
120.0

2.00

100.0

2011

2012

2013

2014*

Q4 2013

Q1 2014

Q2 2014

Q3 2014

*YTD 9M 2014

Hexaware Technologies. All rights reserved. | www.hexaware.com

Business Updates
New Client Adds in Q3 2014

Geography
Americas
Europe
Asia Pacific

Client Add #
4
3
3

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New Wins in Q3 2014

1) Data Management in Capital Markets
2) End to End ownership of Enterprise
Financial Applications
3) MRO Analytics; Data Migration and
Application Modernization for Airlines

Employee Metrics: Promising

Utilization in a narrow band
Net addition during the year 2014: 843
Includes trainees; 45% of net additions in 2014 are
fresh graduate engineers

Employee Attrition: well below industry

Attrition has remained in the 12% - 13% band for
more than a year now

Technical Utilization

Employee Attrition

75.0%

14.0%

74.0%

13.0%

13%

13%

13%

Q4 2013

Q1 2014

Q2 2014

13%

12%
73.0%

12.0%

72.0%

11%
11.0%

71.0%
10.0%

70.0%

10%

9.0%

69.0%
68.0%

8.0%
Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Hexaware Technologies. All rights reserved. | www.hexaware.com

Q3 2014

Q1 2013

Q2 2013

Q3 2013

Q3 2014

Awards & Recognition

Hexaware BPS has won the award for Operational Excellence and Quality in BPO Industry category at the recent
summit for Asia Pacific HRM Congress Awards, 2014. This award aims to honor organizations who have significantly
impacted or influenced the society, the corporate world, and the HR Community in the area of Human Development.
Recipients of these Awards are role models with unquestionable integrity

Hexaware BPS was recognized at the National Awards for Excellence in Outsourcing & BPO 2014 for Best Finance &
Accounts Outsourcing Team. This award demonstrates the companys creativity and ability to sustain a competitive
advantage, providing business transformation and achieving value. It also recognizes organizations and Individuals to
be a benchmark in terms of best practices and business excellence

Hexaware has been ranked as an Emerging Player in the Everest report titled Independent Testing Services IT
Outsourcing (ITO) Service Providers Assessment, the first of its kind for Independent Testing Services, by analysts
Jimit Arora, Yugal Joshi, Chirajeet Sengupta, Ashwin Venkatesan and Sivaram S

Hexaware has been mentioned as one of the sample vendors in different Gartner reports during Q3 2014. These
reports are titled:

Hype Cycle for Business Process Services and Outsourcing, 2014

Hype Cycle for IT Infrastructure and Outsourcing Services, 2014
Hype Cycle for Application Services, 2014
Hype Cycle for Bank Operations Innovation, 2014

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10

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Financial Update

Hexaware Technologies. All rights reserved.

Revenue Walk

Q3 2014 Revenue in US$ terms at $ 110 mn; up 7.9% QoQ; & up 11.4 % YoY
Volume growth: 6.6%
Foreign Exchange Impact: - 0.64% (cross currency headwind: 64 basis points)

` Revenue for the quarter at ` 671 crores; up 9.9% QoQ; and 8.0 % YoY

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12

Profit Margin Walk

EBITDA margin for the quarter was 18.0%; up 140 bps from 16.6% in Q2 2014

Gross margin for Q3 2014 at 37.3%; up110 bps from Q2 2014

Bill rate: +113 bps
Offshore Increment: (52) bps
FX Gains and other factors: +49 bps

SG&A at 19.3% for Q3 2014 vs 19.6 % last quarter, improved by 30 bps

Foreign Exchange Margins Impact: + 39 bps (Direct and SG&A) due to ` depreciation

Forex Hedges: Loss of $ 560k this quarter vs profit of $ 165k last quarter.

Effective Tax Rates: 20.6% for Q3 2014 vs. 22.9% in Q2 2014

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13

Balance Sheet Update

Cash and Cash Equivalents at US$ 67.80 mn ( ` 4,187 mn)

DSO for Q3 2014 at 47 days, 68 days including unbilled.

Third interim dividend:

` 2.35 per share ( 117.5%)
Dividend Payout including taxes ` 851.6 mn ($ 13.79 Mn)
Dividend Payout Ratio: 99%

Capital Expenditure
For the quarter (Q3 2014): ` 269 mn
For the first nine months: ` 475 mn
Q4 Plan for Chennai SEZ: ` 300 mn

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14

Thank you
2014 Hexaware Technologies Limited. All rights reserved. For internal circulation only.

Hexaware Technologies. All rights reserved. | www.hexaware.com