Hexaware Technologies Ltd: Valuation Shift Signals Caution Amidst Market Pressure

Valuation Metrics and Recent Changes

As of 16 Feb 2026, Hexaware Technologies trades at a price of ₹560.95, up 3.13% from the previous close of ₹543.95. Despite this uptick, the company’s valuation grade has been downgraded from 'Hold' to 'Sell' with a Mojo Score of 48.0, signalling caution for investors. The valuation grade change was officially recorded on 15 Feb 2026.

The company’s price-to-earnings (P/E) ratio currently stands at 23.34, a level that has shifted Hexaware’s valuation from previously attractive to now fair. This P/E is moderate when compared to its historical range but is less compelling relative to some peers. The price-to-book value (P/BV) ratio is 5.43, indicating a premium valuation on the company’s net assets, which has also contributed to the reclassification of its valuation status.

Other valuation multiples include an enterprise value to EBIT (EV/EBIT) of 21.27 and EV to EBITDA of 17.25, both suggesting a relatively elevated valuation compared to the sector average. The EV to capital employed ratio is 6.58, while EV to sales stands at 2.46. These figures collectively point to a company valued at a premium, though not excessively so within the software and consulting industry.

Comparative Peer Analysis

When benchmarked against peers in the Computers - Software & Consulting sector, Hexaware’s valuation appears more moderate. For instance, Persistent Systems and Info Edge (India) are rated as 'Very Expensive' with P/E ratios of 47.99 and 55.77 respectively, and EV/EBITDA multiples well above 30. Oracle Financial Services and Mphasis are also classified as 'Expensive' with P/E ratios around 23.65 and 25.63.

In contrast, Hexaware’s P/E of 23.34 and EV/EBITDA of 17.25 place it in a more reasonable valuation bracket, albeit with a downgrade in its Mojo Grade to 'Sell'. This suggests that while the stock is not the most overvalued in its peer group, recent price appreciation and sector headwinds have tempered investor enthusiasm.

Swiggy, another peer, is currently loss-making and rated as 'Risky', highlighting the diversity of valuation and risk profiles within the sector.

Financial Performance and Returns

Hexaware’s return on capital employed (ROCE) is a robust 30.92%, and return on equity (ROE) stands at 23.25%, underscoring efficient capital utilisation and profitability. The dividend yield is a modest 2.04%, offering some income to shareholders amid valuation concerns.

However, the stock’s recent price performance has lagged broader market indices. Year-to-date, Hexaware has declined by 26.63%, significantly underperforming the Sensex’s 3.04% gain over the same period. Over the past month, the stock dropped 23.67%, while the Sensex fell only 1.20%. Even over the past week, Hexaware’s share price fell 8.6%, compared to a 1.14% decline in the Sensex.

Longer-term returns tell a more positive story, with a 5-year return of 19.16% versus the Sensex’s 60.30%, and a 10-year return of 152.23% compared to the Sensex’s 259.46%. This indicates that while the company has delivered solid growth over the long haul, recent market dynamics have weighed heavily on its share price.

Market Context and Sector Dynamics

The Computers - Software & Consulting sector has faced mixed investor sentiment in recent months, with some companies experiencing valuation compression due to concerns over global IT spending and margin pressures. Hexaware’s valuation adjustment reflects these broader trends, as well as company-specific factors such as earnings growth expectations and competitive positioning.

Despite the downgrade in valuation attractiveness, Hexaware maintains strong operational metrics, including a PEG ratio of 0.00, which may indicate that earnings growth expectations are currently subdued or not fully reflected in the price. This contrasts with peers like Oracle Financial Services and Mphasis, which have PEG ratios of 3.88 and 2.52 respectively, suggesting higher growth premiums priced in.

Price Range and Volatility

Hexaware’s 52-week price range spans from ₹521.25 to ₹900.15, highlighting significant volatility over the past year. The current price near ₹560.95 is closer to the lower end of this range, which may offer some valuation support. However, the recent daily trading range between ₹521.25 and ₹589.70 indicates ongoing price fluctuations that investors should monitor closely.

Investment Outlook and Ratings

MarketsMOJO’s downgrade of Hexaware Technologies Ltd to a 'Sell' rating with a Mojo Grade of 48.0 signals a cautious stance. The market cap grade of 2 further suggests that the company is not currently favoured for large-scale institutional accumulation. Investors should weigh the company’s strong profitability and reasonable valuation against recent price underperformance and sector headwinds.

Given the fair valuation status and the stock’s underperformance relative to the Sensex and peers, investors may consider a more defensive approach or explore alternative opportunities within the sector.

Conclusion: Valuation Reassessment Calls for Prudence

Hexaware Technologies Ltd’s shift from an attractive to a fair valuation grade reflects a recalibration of investor expectations amid a challenging sector environment. While the company’s profitability metrics remain strong, the elevated P/BV and moderate P/E ratios, combined with recent price underperformance, suggest that the stock is no longer a compelling value proposition at current levels.

Investors should carefully analyse Hexaware’s fundamentals alongside sector trends and peer valuations before committing fresh capital. The downgrade to a 'Sell' rating by MarketsMOJO underscores the need for prudence and consideration of alternative investments within the software and consulting space.

Long-term holders may find comfort in the company’s solid ROCE and ROE, but near-term price volatility and valuation pressures warrant a cautious approach.

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