4QCY2011 Result Update | IT

February 3, 2012

Hexaware
Performance highlights
Y/E December (` cr) Net revenue EBITDA EBITDA margin (%) PAT* 4QCY11 432 99 23.0 88 3QCY11 366 69 18.7 65 % chg (qoq) 18.0 44.9 427bp 36.3 4QCY10 300 35 11.5 40 % chg (yoy) 44.2 188.1 1150bp 122.7

ACCUMULATE
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code IT 2,895 1.2 100/46 261,669 2 17,605 5,270 HEXT.BO HEXW@IN

`99 `109
-

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

For 4QCY2011, Hexaware reported robust set of results. Major highlights of the results were whopping growth of 6.7% qoq revenue growth (highest in the industry) even in a seasonally soft quarter for IT companies. Hexaware has been outperforming in the mid-cap space since six quarters by growing at a scorching 8.1% CQGR over 1QCY20104QCY2012. Management has been outperforming its guidance every quarter and has guided for at least 20% yoy revenue growth for CY2012. We expect the company to continue its revenue growth on the back of increasing traction for enterprise services as well as continue its operational exuberance. We maintain Accumulate rating on the stock. Quarterly highlights: For 4QCY2011, Hexaware reported USD revenue of US$84.1mn, up 6.7% qoq led by 4.8% qoq volume growth. In INR terms, revenue came in at `432cr, up 18.0% qoq. The companys EBITDA and EBIT margins expanded by 427bp and 455bp qoq to 23.0% and 21.6%, respectively, largely aided by INR deprecation. PAT for the quarter stood at `88cr, up 36.3% qoq. Outlook and valuation: On the back of an improving deal pipeline, management has guided to grow its revenue in CY2012 by at least 20% i.e., above US$370mn, which is highest in the industry. This seems easily achievable by the company given the revenue visibility on account of six large deals signed in past few quarters. Thus, we expect the companys niche focus in enterprise solutions and business intelligence to play out strongly. Further, we expect USD and INR revenue to grow at a scorching 17.9% and 20.6% CAGR over CY201012E, respectively. Hexaware has adequate levers to expand its margins - such as strong volume growth, improvement in utilization level, broadening of the employee pyramid and maintaining SGA at absolute levels which can elevate its EBITDA margin to 19.0% for CY2011 from 18.2% in CY2011. Thus, we expect EBITDA and PAT to grow at a CAGR of 20.3% and 6.3%, respectively. We value the company at PE of 10.8x CY2013E EPS, which gives us a target price of `109. We maintain Accumulate 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 34.5 2.9 10.9 6.9 2.3 26.0 CY2011 1,451 37.6 267 212.9 18.2 8.9 11.1 2.9 26.3 23.6 1.7 9.2 CY2012E 1,864 28.5 277 3.9 19.0 9.2 10.7 2.3 22.0 25.4 1.3 6.7 CY2013E 2,108 13.1 302 8.9 18.2 10.1 9.8 2.0 21.2 24.2 1.1 5.9

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 28.2 9.4 41.4 21.0

Abs. (%) Sensex Hexaware

3m 0.7 15.1

1yr (4.6) 81.4

3yr 92.4 859.8

Ankita Somani
+91 22 39357800 Ext: 6819 [email protected]

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

Please refer to important disclosures at the end of this report

Hexaware | 4QCY2011 Result Update

Exhibit 1: 4QCY2011 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 (%) 4QCY11 432 256 176 76 99 6 93 12 (5) 99 11 88 88 2.9 40.7 23.0 21.6 20.1 3QCY11 366 226 140 71 69 6 62 12 4 78 14 65 65 2.2 38.2 18.7 17.0 16.9 36.3 36.3 248bp 427bp 455bp 320bp 26.8 (18.4) 36.3 % chg (qoq) 18.0 13.3 25.7 7.2 44.9 (1.1) 49.6 4QCY10 300 196 103 69 35 7 28 8 10 45 6 40 40 1.3 34.5 11.5 9.3 12.5 122.7 119.6 617bp 1150bp 1224bp 763bp 120.0 100.8 122.7 % chg (yoy) 44.2 30.6 69.9 10.7 188.1 (4.5) 233.7 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 CY2010 1,055 692 363 269 94 24 70 50 (25) 95 9 85 22 108 2.9 34.4 8.9 6.6 7.9 147.8 210.5 395bp 936bp 994bp 968bp 225.4 341.5 212.9 % chg (yoy) 37.6 29.3 53.3 8.4 182.4 2.5 244.9

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 432 23.0 88

Estimate 416 20.1 68

% Var 3.7 287bp 29.8

Stellar performance
For 4QCY2011, Hexaware reported strong USD revenue growth of 6.7% qoq, with revenue coming at US$84.1mn, primarily led by 4.8% and 1.3% qoq volume and pricing growth. The companys revenue was negatively impacted by 1.1% qoq due to cross-currency movement. In constant currency (CC) terms, revenue came in at US$84.9mn, up 7.8% qoq. In INR terms, revenue came in at `432cr, up 18.0% qoq higher growth as against USD revenue due to qoq steep INR depreciation against USD in 4QCY2011.

February 3, 2012

Hexaware | 4QCY2011 Result Update

Exhibit 3: Trend in revenue growth (qoq)

90 85 80
(US$ mn)

9.0

9.2 84.1

10 9 8 7
(%)

8.0 5.7 4.9 70.4 66.6

75 70 65 60 55 4QCY10 Revenue (US$ mn)

6.2 74.8 5.8

78.8 5.3

6.7 4.8

6 5 4 3 2

1QCY11

2QCY11

3QCY11

4QCY11

Revenue growth - qoq (%)

Volume growth - qoq (%)

Source: Company, Angel Research

During the quarter, the company reported a 0.7% qoq increase in onsite bill rates to US$73.01/hour from US$72.50/hour in 3QCY2011. Offshore billing rates stood flat qoq at US$23.0/hour. Going ahead, the company expects bill rates to remain stable.

Exhibit 4: Trend in billing rates

80 70 60
(US$/hr)

71.22

72.00

72.00

72.50

73.01

50 40 30 20 10 4QCY10 1QCY11 Onsite 2QCY11 3QCY11 Offshore 4QCY11 21.87 22.20 22.50 23.00 23.00

Source: Company, Angel Research

Along with volume growth of 4.8% qoq, increased price realization and onsite effort mix shift aided USD revenue growth by 1.3% and 1.7% qoq, respectively. However, these gains were partially overshadowed by negative impacts from crosscurrency movement by 1.7% qoq.

February 3, 2012

Hexaware | 4QCY2011 Result Update

Exhibit 5: Revenue drivers for 4QCY2011

8 7 6 5 4
(%)

6.7 4.8

3 2 1 0 (1) (2) Volume

1.7

1.3

(1.1) Business mix shift Pricing Cross currency Total revenue growth

Source: Company, Angel Research

Service vertical wise, the companys growth was broad-based. The companys growth was led by testing (contributed 10.8% to revenue) and business intelligence (BI) and analytics (contributed 10.5% to revenue) service verticals which posted 25.3% and 16.7% qoq growth, respectively. Hexawares anchor service vertical, application development and maintenance (ADM) (contributed 39.7% to revenue) emerged as the primary growth driver for the company by reporting 4.6% qoq revenue growth. Going forward, management indicated that it is witnessing strong traction for services such as enterprise solutions, BI and data warehousing.

Exhibit 6: Growth trend in service verticals

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

% to revenue 39.7 29.8 10.8 10.5 5.1 4.1

% chg (qoq) 4.6 4.3 25.3 16.7 (4.5) (2.8)

% chg (yoy) 20.2 28.0 46.6 44.1 9.2 15.1

Industry segment wise, healthcare and insurance led the companys growth by posting 28.7% qoq growth in revenues. Revenues from banking and capital market industry segment grew by 6.4% qoq, while on the other hand, revenue from the travel and transportation segment again declined qoq by 4.8% qoq.

February 3, 2012

Hexaware | 4QCY2011 Result Update

Exhibit 7: Growth trend in industry segments

Industry segments Banking and capital market Healthcare and insurance % to revenue 28.5 16.4 20.7 34.4 % chg (qoq) 6.4 28.7 (4.8) 6.1 % chg (yoy) 20.4 63.1 10.8 28.5

Travel and transportation

Emerging segments
Source: Company, Angel Research

Geography wise, growth was again led by revenue from the Europe, which reported 7.9% qoq growth. Revenues from Americas and Asia Pacific grew by 6.2% and 6.7% qoq.

Exhibit 8: Growth trend in geographies

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

% chg (qoq) 6.2 7.9 6.7

% chg (yoy) 16.3 48.5 52.9

64.4 28.7 6.9

Hiring continues
During 4QCY2011, Hexaware added 153 net employees, most of them being freshers. Of the total hiring done, 140 employees were added in the technical employee base, taking the total technical employee base to 7,627. Management intends to hire 1,500 net employees in CY2012 with 600-700 of them being freshers.

Exhibit 9: Employee metrics

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

4QCY10 1,309 4,590 5,899 222 203 6,511 19.9

1QCY11 1,333 4,725 6,058 159 153 6,664 19.6

2QCY11 1,454 5,334 6,788 731 755 7,419 18.0

3QCY11 1,527 5,960 7,486 698 745 8,164 14.7

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

Utilization level, including trainees, dipped by 90bp qoq to 69.7% in 4QCY2011 from 70.6% in 3QCY2011 because of addition of freshers in the system. The company added 225 employees in January 2012 which are currently undergoing training and induction. Increasing utilization from current levels will be an important margin lever for the company going forward, as trainees would turn billable.

February 3, 2012

Hexaware | 4QCY2011 Result Update

Exhibit 10: Utilization trend

73 72 71
(%)

72.7 71.4 70.6 69.4 68.5 69.7

70 69 68 67 3QCY10

4QCY10

1QCY11

2QCY11

3QCY11

4QCY11

Utilisation - incl. trainees (%)

Source: Company, Angel Research

Margins enhance
During 4QCY2011, the company witnessed 427bp and 455bpp qoq expansion in its EBITDA and EBIT margins to 23.0% and 21.6%, respectively, largely aided by INR deprecation. Factors aiding margins were: 1) 250bp qoq positive impact from gross margin increase 180bp qoq positive due to INR depreciation, 120bp positive due to increase in pricing and 50bp negative due to onsite effort mix shift, 2) 180bp qoq positive impact because of lower SG&A costs and 3) 30bp qoq due to lower depreciation. Going ahead, Hexaware expects its margin to further expand by using levers such as 1) rationalizing employee pyramid, 2) increasing utilization level, 3) lowering SG&A expenses and 4) shifting the revenue mix offshore.

Exhibit 11: Margin profile

45 40 35 30
(%)

34.5

37.3

36.6

38.2

40.7

25 20 15 10 5 4QCY10 1QCY11 Gross margin 2QCY11 EBITDA margin 9.3 11.5 14.3 12.3 15.3

23.0 18.7 21.6 17.0 13.5 3QCY11 EBIT margin 4QCY11

Source: Company, Angel Research

February 3, 2012

Hexaware | 4QCY2011 Result Update

Client pyramid
During 4QCY2011, Hexaware added 15 new clients - three in travel and transportation, two in banking and two in healthcare and insurance industry segment. From a service vertical perspective, four clients were added in enterprise solutions, two in testing, two in BI and analytics and two in BPO space. Of these 15 new client addition, 10 were added from American geography while five from Asia Pacific region. The company added one new client in the US$10-20mn plus revenue bracket; this was shifted from the US$5mn-100mn revenue bracket.

Exhibit 12: Client metrics

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

4QCY10 39 7 2 2 174 11

1QCY11 39 6 2 2 180 10

2QCY11 40 6 2 2 190 14

3QCY11 39 8 1 3 194 12

4QCY11 40 7 2 3 192 15

Outlook and valuation

Hexawares anchor service verticals, enterprise solutions (~30% of revenue) and business intelligence (~10% of revenue) is firing up growth cylinders for the company. The company managed to outperform the entire IT pack with an 8.1% CQGR over 1QCY20104QCY2011. Management has indicated its plan to hire 1,500 net employees in CY2012 (600-700 being freshers), even on the back of addition of net 1,806 employees in CY2011. On the back of an improving deal pipeline, management has guided to grow its revenue in CY2012 by at least 20% i.e., above US$370mn, which is highest in the industry. This seems easily achievable by the company given the revenue visibility on account of six large deals signed in past few quarters. Thus, we expect the companys niche focus in enterprise solutions and business intelligence to play out strongly. Further, we expect USD and INR revenue to grow at a scorching 17.9% and 20.6% CAGR over CY201012E, respectively. Hexaware has adequate levers to expand its margins such as 1) strong volume growth and improvement in utilization level (currently at 69.7%), 2) broadening of the employee pyramid (which currently has ~18.5% of the total employees with less than three years of experience), 3) ability to grow even with maintaining SGA at absolute levels, 4) enterprise solutions and business intelligence that are the companys strong growth drivers, offering improvement in business mix and leading to increased revenue productivity and 5) INR depreciation to elevate its EBITDA margin to 19.0% for CY2011 from 18.2% in CY2011. Thus, we expect EBITDA and PAT to grow at a CAGR of 20.3% and 6.3%, respectively. At the CMP, the stock is trading at PE of 9.8x CY2013E EPS of `10.1. We value the company at PE of 10.8x CY2013E EPS, which gives us a target price of `109. We maintain Accumulate rating on the stock

February 3, 2012

Hexaware | 4QCY2011 Result Update

Exhibit 13: Key assumptions

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

CY2011 20.4 50.2 28.5 19.0 19.9 3.7

CY2012 15.4 49.2 13.1 18.2 22.5 8.9

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

180 160 140 120
(`)

100 80 60 40 20 0
Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 May-06 May-07 May-08 May-09 May-10 May-11 Sep-11 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12

Price
Source: Company, Angel Research

16x

13x

9x

5x

2x

Exhibit 15: Recommendation summary

Company HCL Tech Hexaware Infosys Infotech Enterprises KPIT Cummins Mahindra Satyam MindTree Mphasis NIIT^ Persistent TCS Tech Mahindra Wipro Reco Buy Accumulate Accumulate Neutral Accumulate Accumulate Buy Neutral Buy Neutral Accumulate Neutral Neutral CMP (`) 438 99 2,735 133 149 76 434 375 42 327 1,128 655 412 Tgt Price (`) 520 109 3,047 134 163 87 502 387 55 332 1,262 666 425 Upside (%) 18.7 9.9 11.4 0.8 9.3 14.1 15.7 3.3 30.5 1.6 11.9 1.6 3.3 Target P/E (x) 13.0 10.8 18.0 8.5 10.0 11.0 10.0 11.5 6.9 9.0 19.5 9.0 15.3 FY2013 EBITDA (%) 17.5 19.0 32.0 16.0 15.4 16.0 14.7 16.6 16.3 23.0 29.9 16.8 19.7 FY2013E P/E (x) 11.0 9.8 16.2 8.4 9.1 9.5 8.6 10.2 5.3 9.3 17.4 7.9 14.8 FY2011-13E EPS CAGR (%) 22.1 6.3 18.9 11.9 19.9 38.4 42.1 (3.1) 19.3 0.1 20.6 29.9 13.1 FY2013E RoCE (%) 20.9 24.2 25.8 16.1 19.5 12.6 20.3 14.0 11.0 19.4 32.1 14.6 15.3 FY2013E RoE (%) 23.1 21.2 23.8 13.0 16.9 14.4 17.4 14.2 15.6 14.3 33.3 20.0 20.5

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

February 3, 2012

Hexaware | 4QCY2011 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 amortization % to revenues EBIT % to revenues Other income Forex gain PBT Tax % of PBT PAT Exceptional item Adj. PAT EPS (`) - diluted CY2009 1,039 564 474 45.7 272 26.2 202 19.5 27 2.6 175 16.9 31 (62) 145 10 7.2 134 134 4.6 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 1,864 1,170 694 37.2 340 18.2 354 19.0 34 1.8 320 17.2 46 (20) 346 69 19.9 277 277 9.2 CY2013E 2,108 1,348 760 36.1 377 17.9 383 18.2 38 1.8 345 16.4 49 (4) 389 88 22.5 302 302 10.1

February 3, 2012

Hexaware | 4QCY2011 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 426 153 111 690 44 227 11 866 475 192 21 142 830 255 17 1,000 461 299 195 955 88 345 16 1,016 523 378 295 1,197 20 433 16 1,261 623 416 20 335 1,395 495 16 1,427 576 140 436 560 152 408 648 170 479 704 203 501 752 241 511 29 861 (41) 850 16 866 29 934 26 989 11 1,000 59 1,061 (104) 1,016 1,016 59 1,202 1,261 1,261 59 1,368 1,427 1,427 CY2009 CY2010 CY2011 CY2012E CY2013E

February 3, 2012

10

Hexaware | 4QCY2011 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 CY2009 CY2010 175 27 202 (31) 172 10 161 46 (100) (54) 107 (13) (3) 83 67 (3) (6) (24) (33) 141 285 426 70 24 94 25 119 9 109 (91) (16) (107) 2 4 (6) 67 64 (5) 39 (51) (17) 49 426 475 CY2011 CY2012E CY2013E 240 25 265 68 332 41 292 (139) 178 40 331 (95) 1 (130) (224) (11) 26 (136) (122) (15) 475 461 320 34 354 26 380 69 311 (179) 20 (160) 151 (56) 104 48 (136) (136) 63 461 523 345 38 383 45 427 88 340 (98) 42 (56) 284 (48) (48) (136) (136) 100 523 623

February 3, 2012

11

Hexaware | 4QCY2011 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 2.4 54 2.6 66 3.0 75 3.7 74 4.1 72 20.2 39.8 15.8 6.9 13.2 10.9 23.6 43.2 26.3 25.4 43.4 22.0 24.2 42.9 21.2 0.9 0.8 0.2 1.2 1.0 15.1 0.9 1.4 0.1 1.1 1.0 8.9 0.9 1.3 0.2 1.4 0.9 23.8 0.8 1.1 0.2 1.5 1.0 22.0 0.8 1.1 0.2 1.5 1.0 21.2 4.6 5.5 0.7 29.1 2.9 4.5 1.5 33.8 8.9 10.0 4.7 34.7 9.2 10.6 4.7 43.1 10.1 11.6 4.7 48.8 21.8 18.0 3.4 0.7 2.4 12.3 2.9 34.5 22.0 2.9 1.5 2.3 26.0 2.4 11.1 9.9 2.9 4.7 1.7 9.2 2.4 10.7 9.3 2.3 4.7 1.3 6.7 1.9 9.8 8.5 2.0 4.7 1.1 5.9 1.6 CY2009 CY2010 CY2011 CY2012E CY2013E

February 3, 2012

12

Hexaware | 4QCY2011 Result Update

Research Team Tel: 022 - 3935 7800

E-mail: [email protected]

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 3, 2012

13