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The stock of mid-tier IT player, Hexaware Technologies, fell by more than 13 per cent last Friday. Reports of the promoter group, Baring PE Asia, selling a portion of its stake through block deals led to massive selling in the counter.
As with many other IT companies, the shares of Hexaware too were re-rated significantly over the past one year. The stock price went past ₹500 levels, before correcting in the last one month. In the June quarter, the company’s revenues increased by a healthy 10.3 per cent Y-o-Y. But markets expectations were higher, and the stock declined after the June period results were announced.
Hexaware has guided for a strong 12-13 per cent revenue growth for the current fiscal.
Given that the stock trades at about 23 times its trailing 12 months’ per share earnings even after the current correction, valuations are not inexpensive. Much of its robust growth trajectory seems to have been factored into the share price.
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