Hexaware Q2 net surges to beat market forecast

NEW DELHI (Reuters) - Hexaware Technologies on Wednesday beat market estimates for June quarter profit helped by cost-cutting measures but said the next two quarters would continue to see lower spending at clients.

The software services firm forecast September quarter revenue at $52.5-$54.5 million. Comparable revenue at the year-ago was $66.3 million.

"We're pretty confident for 2010 in terms of further growth, but certainly one, two quarters we have to go by the fact that the IT spends have come down for client companies," Atul Nishar, executive chairman, told CNBB-TV 18 television.

Shares in the firm rose 8 percent before easing to 62.55 rupees, up 4.4 percent at 1:01 p.m. in a Mumbai market that was down nearly 2 percent.

Net profit for its second fiscal quarter rose to 385.6 million rupees from 18.5 million rupees a year ago. Analysts polled by Reuters had expected a profit of 146 million rupees.

Hexaware added 10 new clients in the quarter, taking its total count to 166 and said pricing had slightly improved for both onsite and offshore projects.

Headcount fell to 5,041 from 6,598 a year ago, and Nishar said the numbers would now likely remain stable. Expenditure was also down to 769 mln from 1.16 bln year-on-year.

At the end of the quarter, Hexware's forward covers stood at $129 million, hedged at 40.77 rupees to the dollar, over the next seven quarters.