Current Rating and Its Significance
MarketsMOJO’s 'Hold' rating for Hexaware Technologies Ltd indicates a neutral stance on the stock at present. This suggests that while the company demonstrates solid operational performance and financial health, certain valuation and technical factors advise caution for investors considering new positions. The rating was revised on 12 January 2026, reflecting a recalibration of the stock’s overall investment appeal based on a comprehensive assessment of multiple parameters.
Here’s How the Stock Looks Today
As of 04 February 2026, Hexaware Technologies Ltd holds a Mojo Score of 57.0, placing it in the 'Hold' grade category. This score represents a 15-point decline from its previous score of 72, which corresponded to a 'Buy' rating. The stock’s day change on this date was -3.18%, with mixed returns over recent periods: a modest 1.22% gain over the past week, a 6.34% decline over the last month, and a slight 0.69% decrease over six months. Year-to-date, the stock has declined by 8.00%, while the one-year return is not available.
Quality Assessment
Hexaware Technologies Ltd continues to demonstrate excellent quality metrics. The company maintains a low debt-to-equity ratio, averaging zero, which underscores a conservative capital structure and limited financial risk. Operationally, the firm has delivered positive results for three consecutive quarters, with net sales reaching a quarterly high of ₹3,483.60 crores and PBDIT peaking at ₹601.30 crores. The operating profit margin relative to net sales also stands at a robust 17.26%, reflecting efficient cost management and strong profitability.
Valuation Considerations
Despite its operational strengths, Hexaware Technologies Ltd is currently considered expensive from a valuation standpoint. The company’s price-to-book value stands at 7.5, which is elevated relative to typical industry benchmarks. This premium valuation is supported by a return on equity (ROE) of 20.3%, indicating effective utilisation of shareholder capital. However, the high valuation may limit upside potential and warrants a cautious approach from investors, especially given the stock’s recent price volatility.
Financial Trend Analysis
The financial trend for Hexaware remains positive. The company’s profits have increased by 18% over the past year, signalling healthy growth momentum. This improvement in profitability aligns with the consistent quarterly performance and suggests that the business fundamentals remain sound. However, it is important to note that despite profit growth, the stock price has not reflected this fully, as indicated by the flat one-year return.
Technical Outlook
From a technical perspective, the stock exhibits a mildly bearish trend. The recent price movements, including a 3.18% decline on 04 February 2026 and a negative month-to-date performance, suggest some selling pressure. Additionally, the fact that 100% of promoter shares are pledged introduces an element of risk, as falling markets could trigger further downward pressure on the stock price. The proportion of pledged holdings has doubled over the last quarter, which investors should monitor closely as it may impact stock liquidity and sentiment.
Implications for Investors
The 'Hold' rating implies that investors should maintain existing positions but exercise caution before initiating new investments in Hexaware Technologies Ltd. The company’s excellent quality and positive financial trends provide a solid foundation, but the expensive valuation and technical headwinds temper enthusiasm. Investors may wish to wait for clearer signs of technical recovery or valuation moderation before increasing exposure.
Transformation in full progress! This Micro Cap from Auto Ancillary just achieved sustainable profitability after tough times. Be early to witness this powerful comeback story!
- - Sustainable profitability reached
- - Post-turnaround strength
- - Comeback story unfolding
Sector and Market Context
Hexaware Technologies Ltd operates within the Computers - Software & Consulting sector, a space characterised by rapid technological evolution and competitive pressures. As a midcap company, Hexaware faces challenges from both larger incumbents and agile smaller players. The current 'Hold' rating reflects a balanced view of the company’s ability to sustain growth amid these dynamics while recognising valuation and technical risks.
Summary of Key Metrics as of 04 February 2026
To summarise, the key financial and market metrics for Hexaware Technologies Ltd are as follows:
- Mojo Score: 57.0 (Hold grade)
- Market Capitalisation: Midcap
- Debt to Equity Ratio: 0 (low leverage)
- Net Sales (Quarterly High): ₹3,483.60 crores
- PBDIT (Quarterly High): ₹601.30 crores
- Operating Profit Margin: 17.26%
- Return on Equity (ROE): 20.3%
- Price to Book Value: 7.5 (expensive valuation)
- Stock Returns: 1D -3.18%, 1W +1.22%, 1M -6.34%, 3M +1.20%, 6M -0.69%, YTD -8.00%
- Promoter Shares Pledged: 100%, increased by 100% over last quarter
Investor Takeaway
Investors should interpret the 'Hold' rating as a signal to monitor Hexaware Technologies Ltd closely. The company’s strong fundamentals and positive profit trajectory are encouraging, but the elevated valuation and technical indicators suggest limited immediate upside. Careful portfolio management and attention to market developments will be essential for those holding or considering this stock.
Looking Ahead
Going forward, key factors to watch include the company’s ability to sustain profit growth, any changes in promoter share pledging, and shifts in technical momentum. A reduction in valuation multiples or improvement in technical indicators could prompt a reassessment of the rating. Until then, the 'Hold' stance remains appropriate given the current data.
About MarketsMOJO Ratings
MarketsMOJO’s ratings are derived from a comprehensive analysis of quality, valuation, financial trends, and technical factors. The 'Hold' rating reflects a balanced view that neither strongly favours buying nor selling, helping investors make informed decisions based on a holistic assessment of the stock’s prospects.
Disclaimer
All financial metrics, returns, and fundamentals referenced in this article are as of 04 February 2026, and do not reflect conditions at the time of the rating change on 12 January 2026. Investors should consider the most recent data when making investment decisions.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
