Bengaluru: Hexaware Technologies reported stronger-than-industry growth in the June quarter, with revenue rising 6.3% year on year in constant currency (CC) and 6.1% in reported dollar terms to $405.4 million. Revenue grew 4.4% sequentially in both reported and constant currency terms. Its EBIT margin expanded 68 basis points sequentially to 13.6%, but net profit declined due to foreign exchange hedge losses.The mid-tier IT services company reported a net profit of $34.9 million, down 21.1% year on year, even as EBIT grew 9.8% sequentially.CEO R Srikrishna said investors should distinguish between operating performance and the impact of treasury items. “Operationally, we actually did very well. You have to look at EBIT and EPS separately. EBIT improved from 13% to 13.6%. The decline in net profit and EPS was due to a hedge loss, not the underlying business,” he said.The company reported an $8 million hedge loss during the quarter following the sharp appreciation of the rupee against the US dollar. Srikrishna said the impact would persist but gradually taper, with hedge losses expected to decline to about $5 million next quarter and $3 million in the following quarter.Srikrishna said AI is now embedded across every service line, including software development, IT operations, outsourcing, business process outsourcing (BPO) and data engineering. “Every new piece of work we’re doing is based on AI,” he said.Responding to questions on whether IT companies are simply reclassifying existing work as AI revenue, Srikrishna said AI differs from the earlier digital transformation wave because it is embedded across every client engagement rather than being a separate service offering. “I can confidently say that 100% of our bookings and the resultant revenue over the past year or so have involved AI in some capacity,” he said.The company also highlighted eight strategic deal wins during the quarter, including three AI engagements. While Hexaware did not disclose deal values, Srikrishna said outsourcing contracts remain the largest. He added that two legacy modernisation deals signed during the quarter were valued at about $10 million each, significantly larger than similar projects in the past.
