IT services firm Hexaware Technologies will report its Q1FY20 earnings on Wednesday and the street is expecting a double-digit profit growth this time around.
A dollar revenue growth of 2.2 percent, margins are seen up by 20 basis points (bps) to 14.2 percent while profits could be significantly higher at about 17-18 percent.
The company follows a calendar year accounting practice, so they have already given a guidance for calendar year 2019 which stands at 12-14 percent.
However, when they gave this guidance, they also said that growth will be back-ended which means growth will be stronger in the second half of the year versus the first half which is why Q1CY19 growth is not going to be as high.
Margins are seen higher by 20 bps because in the prior quarter, margins had collapsed by 140 bps and there will be a part reversal there.
The key to track from Hexaware will be the mergers and acquisitions (M&A) policy because the company said that they expect to spend $250-300 million in cash for acquisitions in the next two-three years. The attrition rates for the company are also quite high in the prior quarter at 17 percent.