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HSBC downgraded Hexaware Technologies (HEXW.NS) from Buy to Hold, while cutting its target price to ₹735 from ₹970. The downgrade reflects concerns over margin pressures and slower-than-expected growth in IT services. Despite strong fundamentals, analysts advise caution amid global tech sector headwinds.
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Key Highlights
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Rating Downgrade: HSBC shifted its recommendation on Hexaware Technologies from Buy to Hold, signaling a more cautious outlook.
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Target Price Cut: The brokerage reduced its target price to ₹735 per share from ₹970, citing valuation concerns and near-term growth challenges.
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Sector Context: The IT services sector has faced global demand softness, pricing pressures, and rising costs, impacting earnings visibility.
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Company Fundamentals: Hexaware continues to maintain a diversified client base and digital transformation capabilities, but analysts expect slower margin expansion in FY26.
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Investor Sentiment: The downgrade may temper optimism among investors, though long-term prospects in cloud, AI, and automation services remain intact.
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Market Impact: Shares of Hexaware are likely to see short-term volatility as investors recalibrate expectations in line with HSBC’s revised outlook.
Why It Matters
HSBC’s downgrade underscores the cautious sentiment in India’s IT services sector, highlighting the need for cost discipline and innovation to sustain growth. For investors, Hexaware remains a steady player, but near-term challenges warrant a more balanced approach.
Sources: HSBC Research Note, Economic Times, Moneycontrol
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