4QCY2012 Result Update | IT

February 11, 2013

Hexaware
Performance highlights
Y/E December (` cr) Net revenue EBITDA EBITDA margin (%) PAT* 4QCY12 502 85 16.9 66 3QCY12 508 110 21.6 84 % chg (qoq) (1.0) (22.9) (477)bp (21.2) 4QCY11 432 99 23.0 88 % chg (yoy) 16.3 (14.8) (615)bp (24.9)

BUY
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Net debt (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code IT 2,454 (447) 1.1 142/73 307,530 2 19,461 5,898 HEXT.BO HEXW@IN

`84 `113
12 Months

Source: Company, Angel Research; Note: *Excluding exceptional item

For 4QCY2012, Hexaware Technologies (Hexaware) reported broadly in-line set of results. Overall volume of the company declined by 1.1% qoq due to sudden project closure of one of the companys top clients. The company cited that work from its top account remains intact outside of the project cancellation impacting revenues in 4QCY2012 and 1QCY2013. The Management has guided for a double digit revenue growth in CY2013 and expects revenue to grow by 1.7-2.4% qoq in 1QCY2013. We maintain our Buy rating on the stock. Quarterly highlights: For 4QCY2012, Hexaware reported USD revenue of US$92.4mn, down 0.4% qoq. In INR terms, revenue came in at `502cr, down 1.0% qoq. The company witnessed a 477bp and 481bp qoq decline in its EBITDA and EBIT margins to 16.9% and 15.1%, respectively, impacted majorly because of challenges faced at one of its top clients. PAT came in at `66cr, down 21.2% qoq. Outlook and valuation: The Management indicated that the company remains confident of growing in double digits in CY2013 and cited that work from its top account remains intact outside of the project cancellation impacting revenues in 4QCY2012 and 1QCY2013. Also, the account should grow on a yoy basis in CY2013. For 1QCY2013, the company has given revenue guidance of US$9495mn, which translates to sequential growth of 1.7-2.8%. To achieve full year guidance of double digit growth (assuming 1QCY2013 revenues remain in the middle of the guidance range), the company needs to clock ~4% CQGR for the rest three quarters which looks a bit stretched. We expect the company to grow by 8.5% in CY2013; and post a USD and INR revenue CAGR of 9.3% and 9.8% over CY201214E, respectively. The Management expects margins to improve by ~150-200bp qoq in 1QCY2013. The margin slide during 4QCY2012 is expected to be recovered only gradually, however, as utilization picks up and growth improves, we expect margins to improve going forward. We value the company at 9.5x CY2014E EPS of `11.9, which gives us a target price of `113 and maintain our Buy rating on the stock. Key financials (Indian GAAP, Consolidated)
Y/E December (` cr) Net sales % chg Net profit % chg EBITDA margin (%) EPS (`)* P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x) CY2010 1,055 1.5 85 (36.4) 8.9 2.9 29.2 2.5 11.2 7.1 1.9 21.3 CY2011 1,451 37.6 267 212.9 18.2 8.9 9.4 2.4 26.3 23.6 1.4 7.6 CY2012E 1,948 34.3 328 22.8 20.9 10.9 7.7 2.0 27.2 31.2 1.0 4.9 CY2013E 2,136 9.6 303 (7.5) 18.3 10.1 8.3 1.7 21.2 24.8 0.8 4.6 CY2014E 2,350 10.0 357 17.7 19.6 11.9 7.1 1.5 21.8 25.6 0.7 3.6

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 28.1 6.5 39.6 25.8

Abs. (%) Sensex Hexaware

3m 4.2 (25.4)

1yr 9.6 (23.2)

3yr 20.5 123.2

Ankita Somani
+91 22 39357800 Ext: 6819 ankita.somani@angelbroking.com

Source: Company, Angel Research; Note: *Excluding exceptional item

Please refer to important disclosures at the end of this report

Hexaware | 4QCY2012 Result Update

Exhibit 1: 4QCY2012 performance (Indian GAAP, Consolidated)

Y/E December (` cr) Revenue Direct costs Gross profit SG&A expenses EBITDA Dep. and amortization EBIT Other income Forex gain PBT Tax PAT Exceptional item Final PAT Diluted EPS* Gross margin (%) EBITDA margin (%) EBIT margin (%) PAT margin (%) 4QCY12 502 321 181 97 85 9 76 9 (5) 81 14 66 66 2.2 36.1 16.9 15.1 13.1 3QCY12 508 307 201 91 110 9 101 9 (4) 107 23 84 84 2.8 39.6 21.6 19.9 16.4 (21.2) (21.4) (347)bp (477)bp (481)bp (332)bp (24.3) (36.0) (21.2) % chg (qoq) (1.0) 4.7 (9.7) 6.2 (22.9) 1.1 (25.0) 4QCY11 432 256 176 76 99 6 93 12 (5) 99 11 88 88 2.9 40.7 23.0 21.6 20.1 (24.9) (25.2) (459)bp (615)bp (647)bp (708)bp (18.8) 29.7 (24.9) % chg (yoy) 16.3 25.3 3.2 26.6 (14.8) 41.3 (18.6) CY2012 1,948 1,185 764 356 407 32 375 40 (11) 404 76 328 328 10.9 39.2 20.9 19.2 16.6 CY2011 1,451 894 557 292 265 25 240 43 25 308 41 267 267 8.9 38.4 18.2 16.5 17.6 22.8 22.2 82bp 267bp 271bp (101)bp 31.4 87.7 22.8 % chg (yoy) 34.3 32.5 37.2 22.0 54.0 30.8 56.4

Source: Company, Angel Research; Note: * Excluding exceptional item

Exhibit 2: Actual vs Angel estimates

(` cr) Net revenue EBITDA margin (%) PAT
Source: Company, Angel Research

Actual 502 16.9 66

Estimate 496 16.4 61

% Var 1.3 46bp 8.5

In-line performance
For 4QCY2012, Hexaware reported USD revenue of US$92.4, down 0.4% qoq, majorly because of 1.1% qoq volume decline. This was because the company witnessed change in project scope and deliverables from a large client, which is amongst the companys top-10 clients. The Management indicated that the decline in revenue of this large client (by 21.3% qoq to US$10.8mn) in 4QCY2012 is a temporary blip and expects this account to grow on a yoy basis in CY2013. In INR terms, the revenue came in at `502cr, down 1.0% qoq. During the quarter, the company reported a slight improvement of ~1% in its onsite and offshore bill rates to US$74.3/hour and US$23.2/hour. The Management indicated that on a broader basis the company expects billing rates to remain stable. Increase in bill rates aided the companys revenues by 36bp qoq.

February 11, 2013

Hexaware | 4QCY2012 Result Update

Exhibit 3: Trend in revenue growth (qoq)

95 90 85 4.8 84.1 88.0 4.7 3.6 1.7 1.7 (0.4) (1.1) 4QCY11 Revenue (US$ mn)
Source: Company, Angel Research

6.7

6.6 91.2 4.2

8 92.8 92.4 6 4 2 0 (2)

(US$ mn)

80 75 70 65 60

1QCY12

2QCY12

3QCY12

4QCY12

Revenue growth - qoq (%)

Volume growth - qoq (%)

Exhibit 4: Trend in billing rates

80 70 60 73.01 73.90 73.50 73.54 74.27

(US$/hr)

50 40 30 20 10 4QCY11 1QCY12 Onsite 2QCY12 3QCY12 Offshore 4QCY12 23.00 22.90 22.85 22.97 23.16

Source: Company, Angel Research

Service vertical wise, the companys growth was led by testing (contributed 11.6% to revenue) and business intelligence (BI) & analytics (contributed 12.8% to revenue), revenue of which grew by a whopping 17.9% and 9.9% qoq, respectively. This was followed by infrastructure management services (IMS), the revenue of which grew by 7.1% qoq. Hexawares anchor service vertical, application development and maintenance (ADM; contributed 35.8% to revenue) reported a 7.2% qoq decline in its revenue, majorly because of pressure seen at one of its top client. Revenue from BPO and enterprise solutions declined by 7.4% and 2.1% qoq, respectively. Enterprise services cooled off following a very strong 2QCY2012 in which it grew by 15.8% qoq, while BPO has now declined in four out of the last five quarters. Going forward, the Management indicated that it is witnessing strong traction for services such as enterprise solutions, BI and IMS.

February 11, 2013

(%)

Hexaware | 4QCY2012 Result Update

Exhibit 5: Growth trend in service verticals

Service verticals ADM Enterprise solutions Testing BI and analytics BPO IMS
Source: Company, Angel Research

% to revenue 35.8 30.1 11.6 12.8 4.0 5.7

% chg (qoq) (7.2) (2.1) 17.9 9.9 (7.4) 7.1

% chg (yoy) (0.9) 11.0 18.0 33.9 (13.8) 52.7

Industry segment wise, once again banking and capital markets posted modest growth with the segments revenue growth coming in at 3.9% qoq. The company expects this segment to grow at a higher rate than the companys average growth rate in CY2013. Healthcare and insurance led the companys growth by posting 6.8% qoq revenue growth. Revenue growth from travel and transportation again stood muted at 0.1% qoq. Hexaware added two new clients each in banking & capital markets and healthcare & insurance industry segments and one client in the travel and transportation industry segment.

Exhibit 6: Growth trend in industry segments

Industry segments Banking and capital market Healthcare and insurance % to revenue 33.7 16.3 20.2 29.8 % chg (qoq) 3.9 6.8 0.1 (8.4) % chg (yoy) 29.9 9.2 7.2 (4.8)

Travel and transportation

Emerging segments
Source: Company, Angel Research

Geography wise, growth was again led by America, the revenue from where grew by 5.8% qoq while revenues from Europe declined by 15.7% qoq. The company, however, maintained that Europe remains stable.

Exhibit 7: Growth trend in geographies

% to revenue Americas Europe Asia Pacific
Source: Company, Angel Research

% chg (qoq) 5.8 (15.7) 0.9

% chg (yoy) 18.1 (11.2) 21.0

69.2 23.2 7.6

Hiring and utilization

During 4QCY2012, Hexaware reported net reduction of 74 employees, taking its total employee base to 9,069. Out of the total reduction, 68 employees were reduced from its technical employee base, taking the total technical employee base to 8,371. Attrition rate during 4QCY2012 inched up slightly to 8.7% from 8.4% in 3QCY2012. The Management indicated that the companys current focus is to improve utilization level, thus implying that hiring will be demand based in the near-term.

February 11, 2013

Hexaware | 4QCY2012 Result Update

Exhibit 8: Employee metrics

Particulars Technical Onsite Offshore Total technical employees Net technical emp. addition Net addition (overall) Total employees Attrition (%)
Source: Company, Angel Research

4QCY11 1,564 6,063 7,627 140 153 8,317 13.9

1QCY12 1,595 6,330 7,925 299 307 8,624 11.0

2QCY12 1,624 6,419 8,043 118 109 8,733 9.6

3QCY12 1,728 6,711 8,439 396 410 9,143 8.4

4QCY12 1,750 6,620 8,371 (68) (74) 9,069 8.7

Utilization level, including trainees, declined by 370bp qoq to 63.9% (lowest level in last five years) in 4QCY2012 from 67.6% in 3QCY2012. Improving utilization from current levels will be an important margin level for the company going ahead.

Exhibit 9: Utilization trend

72 71 70 69 68 70.6 69.7 68.6 67.6 70.0

(%)

67 66 65 64 63 62 3QCY11 4QCY11 1QCY12 2QCY12 3QCY12 4QCY12 Utilization - incl. trainees (%) 63.9

Source: Company, Angel Research

Margins decline
During 3QCY2012, the company witnessed a 477bp and 481bp qoq decline in its EBITDA and EBIT margins to 16.9% and 15.1%, respectively, impacted majorly because of challenges faced at one of its top clients. The margin movement was because of following factors: 1) 216bp qoq negative impact due to decline in utilization level, 2) 49bp qoq negative impact due to onsite effort shift, 3) 22bp qoq positive impact from increase in bill rates, 4) 130bp negative impact due to increase in SG&A costs, and 5) 90bp negative impact from some other costs. Hexaware has guided for 150-200bp qoq increase in margins in 1QFY2013 by using levers such as increasing utilization level and shifting the revenue mix offshore.

February 11, 2013

Hexaware | 4QCY2012 Result Update

Exhibit 10: Margin profile

45 40 35 30
(%)

40.7

41.3

40.1

39.6 36.1

25 20 15 10 5

23.0 21.6

22.4 20.8

22.9 21.4

21.6 16.9 19.9 15.1

4QCY11

1QCY12 Gross margin

2QCY12 EBITDA margin

3QCY12

4QCY12

EBIT margin

Source: Company, Angel Research

Client pyramid
During 4QCY2012, Hexaware added 11 new clients three from America, two from Europe and six from the APAC region. From a service vertical perspective, five clients were added in enterprise solutions, three in testing and one in BI and analytics. The company added one client in the US$10mn-20mn revenue bracket. The active client base of the company increased to 218 in 4QCY2012 from 217 in 3QCY2012. The revenue from the companys top client declined by 21.3% qoq (impacted adversely by cancellation of a large engagement within that client), while revenues from top 2-5 clients grew by 12.5% qoq. Revenue from non top-10 clients declined by 0.8% qoq.

Exhibit 11: Client metrics

No. of clients US$1mn5mn US$5mn10mn US$10mn20mn US$20mn plus Total clients billed Clients added
Source: Company, Angel Research

4QCY11 40 7 2 3 192 15

1QCY12 42 7 3 3 201 12

2QCY12 44 7 3 3 210 12

3QCY12 43 7 4 3 217 12

4QCY12 40 7 5 3 218 11

Outlook and valuation

The Management indicated that the company remains confident of growing in double digits in CY2013 and intends to retain ~50% dividend payout policy going ahead. The company cited that work from its top account remains intact outside of the project cancellation impacting revenues in 4QCY2012 and 1QCY2013. Also, the account should grow on a yoy basis, despite US$3mn revenue loss in 4QCY2013. The company expects top-10 clients to continue contributing over 50% of overall revenues and new customers to contribute between 5-7% of revenues. The company is currently chasing 2-3 large deals in the pipeline and is currently in advanced stage of discussion in one of them. In addition, Oracle is expected to release its new version of Peoplesoft in CY2013. While this is expected

February 11, 2013

Hexaware | 4QCY2012 Result Update

to drive upgrade-driven revenues for Hexaware, the same are anticipated accruing largely in CY2014 and some revenue may accrue towards the end of CY2013. For 1QCY2013, the company has given revenue guidance of US$94-95mn which translates to sequential growth of 1.7-2.8%. To achieve full year guidance of double digit growth (assuming 1QCY2013 revenues remain in the middle of the guidance range), the company needs to clock ~4% CQGR for the rest three quarters which looks a bit stretched as this will require large deal wins. We expect the company to grow by 8.5% in CY2013. We expect the company to post a USD and INR revenue CAGR of 9.3% and 9.8% over CY201214E, respectively. On the margin front, the Management expects margins to improve by ~150200bp qoq in 1QCY2013. The margin slide during 4QCY2012 is expected to be recovered only gradually, however, as utilization picks up and growth improves (aided by Peoplesoft upgrades), we expect margins to improve going forward. We expect EBITDA and PAT to post a CAGR of 6.2% and 4.3%, respectively. At the current market price, the stock is trading at a PE of 7.1x CY2014E EPS of `12.0. We value the company at 9.5x CY2014E EPS of `11.9, which gives us a target price of `113. We maintain our Buy rating on the stock.

Exhibit 12: Key assumptions

Particulars Revenue growth USD terms (%) USD-INR rate Revenue growth INR terms (%) EBITDA margin (%) Tax rate (%) EPS growth (%)
Source: Company, Angel Research

CY2013 8.5 54.0 9.6 18.3 21.0 (7.6)

CY2014 10.0 54.0 10.0 19.6 22.0 17.7

Exhibit 13: Change in estimates

CY2013E Parameter (` cr) Net revenue EBITDA Other income PBT Tax PAT Earlier Estimates 2,118 403 41 406 85 321 Revised estimates 2,136 392 44 384 81 303 Variation (%) 0.9 (2.7) 8.9 (5.6) (5.6) (5.6) Earlier estimates 2,350 460 54 457 101 357 CY2014E Revised estimates 2,350 460 54 457 101 357 Variation (%) -

Source: Company, Angel Research

February 11, 2013

Hexaware | 4QCY2012 Result Update

Exhibit 14: One-year forward PE(x) chart

180 160 140 120
(`)

100 80 60 40 20 0
Dec-08 Apr-07 Mar-10 Aug-10 Oct-09 Apr-12 Jul-08 Feb-08 Nov-06 Nov-11 Sep-07 May-09 Sep-12 Feb-13 Jun-06 Jan-06 Jan-11 Jun-11

Price
Source: Company, Angel Research

16x

13x

9x

5x

2x

Exhibit 15: Recommendation summary

Company HCL Tech Hexaware Infosys KPIT Cummins Mahindra Satyam MindTree Mphasis NIIT^ Persistent TCS Tech Mahindra Wipro Reco Accumulate Buy Neutral Buy Accumulate Accumulate Accumulate Buy Neutral Neutral Accumulate Neutral CMP (`) 669 84 2,791 163 110 119 783 348 26 534 1,414 996 410 Tgt Price (`) 765 113 184 140 126 868 396 36 1,105 Upside (%) 14.4 34.4 12.8 27.8 5.7 10.9 13.7 39.5 10.9 FY2014 EBITDA (%) 20.7 18.3 28.8 17.4 15.2 19.8 19.3 17.5 10.9 24.1 28.9 19.6 19.4 FY2014E P/E (x) 12.7 8.3 16.1 8.4 8.6 10.5 9.0 9.2 4.2 9.9 17.9 9.0 14.8 FY2011-14E EPS CAGR (%) 13.6 4.1 5.9 10.3 16.9 3.7 17.4 0.0 (2.7) 15.1 13.3 7.9 6.8 FY2014E EV/Sales (%) 1.5 0.8 2.9 0.5 0.7 1.2 0.9 0.7 0.1 1.1 3.7 1.7 1.7 FY2014E RoE (%) 22.9 21.2 21.3 13.6 20.5 23.7 21.7 13.5 14.1 18.0 29.7 22.3 17.9

Infotech Enterprises Accumulate

Source: Company, Angel Research; Note: ^Valued on SOTP basis

Company Background
Hexaware is a mid-cap Indian IT company and is the 18th largest Indian software exporter according to Nasscom 2010 rankings. Under the leadership of Chairman Mr Atul Nishar and Vice Chairman and CEO Mr Chandrashekar (ex-Wipro Technologies), Hexaware has differentiated itself from its peers and built a niche position in the airlines vertical and in PeopleSoft implementation. Hexaware offers its services to clients mainly in the BFSI and travel and transportation industries.

February 11, 2013

Hexaware | 4QCY2012 Result Update

Profit and loss statement (Indian GAAP, Consolidated)

Y/E December (` cr) Revenues Direct costs Gross profit % to revenues SG&A expenses % to revenues EBITDA % to revenues Depreciation and amort. % to revenues EBIT % to revenues Other income Forex gain PBT Tax % of PBT PAT Exceptional item Adj. PAT EPS (`) - diluted CY2010 1,055 692 363 34.4 269 25.5 94 8.9 24 2.3 70 6.6 50 (25) 95 9 9.8 85 22 108 2.9 CY2011 1,451 894 557 38.4 292 20.1 265 18.2 25 1.7 240 16.5 43 25 308 41 13.2 267 267 8.9 CY2012E 1,948 1,185 764 39.2 356 18.3 407 20.9 32 1.7 375 19.2 40 (11) 404 76 18.9 328 328 10.9 CY2013E 2,136 1,355 781 36.5 389 18.2 392 18.3 37 1.8 354 16.6 44 (15) 384 81 21.0 303 303 10.1 CY2014E 2,350 1,468 883 37.6 423 18.0 460 19.6 41 1.8 419 17.8 54 (15) 457 101 22.0 357 357 11.9

February 11, 2013

Hexaware | 4QCY2012 Result Update

Balance sheet (Indian GAAP, Consolidated)

Y/E December (` cr) Liabilities Share capital Reserves Forex MTM Total shareholders' funds Borrowings Total liabilities Assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Current assets Cash and cash equivalent Debtors Current assets - forex MTM Others Total current assets Current liability - forex MTM Other current liabilities Deferred tax Total assets 475 192 21 142 830 255 17 1,000 461 299 195 955 88 345 16 1,016 447 365 226 1,038 22 339 7 1,204 666 404 256 1,326 46 390 7 1,430 788 444 282 1,514 20 422 10 1,633 560 152 408 648 170 479 719 199 520 769 237 533 829 278 551 29 934 26 989 11 1,000 59 1,061 (104) 1,016 1,016 59 1,221 (76) 1,204 1,204 59 1,371 1,430 1,430 59 1,574 1,633 1,633 CY2010 CY2011 CY2012E CY2013E CY2014E

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Hexaware | 4QCY2012 Result Update

Cash flow statement (Indian GAAP, Consolidated)

Y/E December (` cr) Pre-tax profit from operations Depreciation Pre tax cash from operations Other income/prior period ad Net cash from operations Tax Cash profits (Inc)/dec in current assets Inc/(dec) in current liabilities Net trade working capital Cash flow from operating activities (Inc)/dec in fixed assets (Inc)/dec in deferred tax asset Inc/(dec) in other non-current liabilities Cash flow from investing activities Inc/(dec) in debt Inc/(dec) in equity/premium Dividends Cash flow from financing activities Cash generated/(utilized) Cash at start of the year Cash at end of the year CY2010 CY2011 CY2012E CY2013E CY2014E 70 24 94 25 119 9 109 (91) (16) (107) 2 4 (6) 67 64 (5) 39 (51) (17) 49 426 475 240 25 265 68 332 41 292 (139) 155 16 307 (95) 1 (130) (224) (11) 50 (136) (98) (15) 475 461 375 32 407 29 436 76 360 (97) (71) (168) 192 (74) 9 28 (37) 16 (184) (168) (13) 461 447 354 37 392 29 421 81 340 (69) 74 5 346 (50) 76 26 (153) (153) 219 447 666 419 41 460 39 498 101 398 (66) 6 (60) 338 (60) (3) (63) (153) (153) 122 666 788

February 11, 2013

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Hexaware | 4QCY2012 Result Update

Key ratios
Y/E December Valuation ratio (x) P/E P/CEPS P/BVPS Dividend yield (%) EV/Sales EV/EBITDA EV/Total assets Per share data (`) EPS Cash EPS Dividend Book value DuPont analysis Tax retention ratio (PAT/PBT) Cost of debt (PBT/EBIT) EBIT margin (EBIT/Sales) Asset turnover ratio (Sales/Assets) Leverage ratio (Assets/equity) Operating ROE Return ratios (%) RoCE (pre-tax) Angel RoIC RoE Turnover ratios(x) Asset turnover (fixed assets) Debtor days 2.6 66 3.0 75 3.7 68 4.0 69 4.1 69 7.1 13.9 11.2 23.6 43.2 26.3 31.2 49.6 27.2 24.8 46.4 21.2 25.6 49.5 21.8 0.9 1.4 0.1 1.1 1.0 9.1 0.9 1.3 0.2 1.4 0.9 23.8 0.8 1.1 0.2 1.6 0.9 25.6 0.8 1.1 0.2 1.5 1.0 21.2 0.8 1.1 0.2 1.4 1.0 21.8 2.9 4.5 1.5 33.0 8.9 10.0 4.7 34.7 10.9 12.3 6.3 41.2 10.1 11.6 5.2 48.9 11.9 13.6 5.2 55.8 29.2 18.6 2.5 1.8 1.9 21.3 2.0 9.4 8.4 2.4 5.5 1.4 7.6 2.0 7.7 6.8 2.0 7.5 1.0 4.9 1.7 8.3 7.2 1.7 6.2 0.8 4.6 1.3 7.1 6.2 1.5 6.2 0.7 3.6 1.0 CY2010 CY2011 CY2012E CY201E CY2014E

February 11, 2013

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Hexaware | 4QCY2012 Result Update

Research Team Tel: 022 - 3935 7800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Hexaware No No No No

Note: We have not considered any Exposure below `1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

February 11, 2013

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