Current Rating and Its Significance
MarketsMOJO’s current rating of Sell for Hexaware Technologies Ltd indicates a cautious stance for investors. This rating suggests that the stock is expected to underperform relative to the broader market or its sector peers in the near term. Investors should consider this recommendation as a signal to evaluate risk carefully and potentially reduce exposure, depending on their portfolio strategy and risk tolerance.
Quality Assessment
As of 15 February 2026, Hexaware Technologies maintains an excellent quality grade. This reflects the company’s strong operational fundamentals, including a low debt-to-equity ratio averaging zero, which indicates a conservative capital structure with minimal financial leverage. The company’s return on equity (ROE) stands at a robust 23.3%, signalling efficient utilisation of shareholder capital to generate profits. Such quality metrics typically underpin long-term stability and resilience.
Valuation Perspective
The valuation grade for Hexaware is currently assessed as fair. The stock trades at a price-to-book value of 5.4, which is relatively elevated, suggesting that the market prices in growth expectations. However, this valuation is tempered by the company’s flat financial trend and recent operational challenges. Investors should weigh whether the current price adequately reflects the company’s earnings potential and risks.
Financial Trend Analysis
Financially, Hexaware’s trend is characterised as flat. The latest quarterly results ending December 2025 show subdued performance, with PBDIT at Rs 377.90 crores, the lowest in recent quarters, and an operating profit margin of 10.86%, also at a low point. Profit before tax excluding other income stands at Rs 223.00 crores, reflecting limited growth momentum. Despite a 24% rise in profits over the past year, the stock’s returns have not mirrored this improvement, indicating possible market scepticism or external headwinds.
Technical Outlook
The technical grade for Hexaware is bearish, signalling downward momentum in the stock price. Recent price action shows a 1-day gain of 3.13%, but this is overshadowed by negative returns over longer periods: -8.60% over one week, -23.67% over one month, and -22.56% over six months. Year-to-date, the stock has declined by 26.63%. This trend suggests persistent selling pressure and weak investor sentiment, which may continue to weigh on the stock in the near term.
Additional Considerations
One notable risk factor is the 100% pledge of promoter shares. This is a significant concern as pledged shares can exert additional downward pressure on the stock price during market downturns, especially if lenders seek to liquidate holdings. The proportion of pledged shares has doubled over the last quarter, intensifying this risk. Such developments warrant close monitoring by investors, as they may impact stock liquidity and price stability.
Market Performance Context
Hexaware Technologies is classified as a midcap stock within the Computers - Software & Consulting sector. Despite its strong quality metrics, the stock has underperformed the broader market over the past year, with no positive returns recorded. This underperformance, combined with flat financial trends and bearish technical signals, supports the current Sell rating.
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What This Rating Means for Investors
For investors, the Sell rating on Hexaware Technologies Ltd suggests caution. While the company’s operational quality remains excellent, the combination of flat financial trends, fair valuation, bearish technicals, and elevated promoter pledge levels creates a challenging environment for near-term stock appreciation. Investors should consider these factors carefully when making portfolio decisions, potentially favouring stocks with stronger momentum or more favourable risk profiles.
Summary of Key Metrics as of 15 February 2026
To summarise, the stock’s Mojo Score stands at 48.0, reflecting the overall Sell grade. The company’s debt-to-equity ratio remains at zero, underscoring a debt-free balance sheet. Profitability metrics such as ROE at 23.3% are strong, but recent quarterly operating profits and margins have declined. The stock’s price performance has been weak across multiple time frames, with a notable 26.63% decline year-to-date. The full pledge of promoter shares adds a layer of risk that investors should not overlook.
Sector and Market Position
Operating in the Computers - Software & Consulting sector, Hexaware Technologies faces competitive pressures and market volatility that have contributed to its current rating. Midcap stocks like Hexaware often experience greater price swings and sensitivity to sector trends. The current Sell rating reflects a comprehensive assessment of these dynamics alongside company-specific fundamentals.
Conclusion
In conclusion, Hexaware Technologies Ltd’s current Sell rating by MarketsMOJO, effective from 15 February 2026, is grounded in a balanced evaluation of quality, valuation, financial trends, and technical outlook. While the company exhibits strong quality metrics, the flat financial performance, bearish price action, and promoter share pledging risks justify a cautious stance. Investors should monitor developments closely and consider this rating within the context of their broader investment strategy.
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