Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the technology sector. The brokerage house expects Hexaware Tech to report a 24.1 percent growth quarter-on-quarter (growth of 5.7 percent year-on-year) in net profit at Rs 104.5 croreSales are expected to increase by 3.3 percent Q-o-Q (up 9.7 percent Y-o-Y) to Rs 847 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 13.6 percent Q-o-Q (up 2.5 percent Y-o-Y) to Rs 135.6 crore.Motilal Oswal's report on Hexaware TechWe expect USD revenue to grow 4.1 percent Q-o-Q to USD126.6m. In 1Q, HEXW was impacted by client-specific issues. The company expects growth for the year to be dominated by 2Q and 3Q.EBITDA margin has declined by 320bp in the last two quarters. While the decline in 4Q was attributed to several one-offs, 1Q was a result of revenue decline, calendar and H1B visa/medical expenses. We expect some recouping of profitability given the revival of revenue growth in 2QCY16 and one-offs in 1Q. Expect EBITDA margin of 16 percent (+140bp Q-o-Q).Our PAT estimate for the quarter is Rs 104.5 crore, up 24.1 percent from the previous quarter, on the back of higher revenue, margins and Other Income.Dividend payout has remained healthy thus far, and is expected to continue in line with the policy through the year. We expect a dividend of Rs 2.1/share, maintaining a payout ratio of 65 percent.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
