Hexaware Technologies denies report of revenue headwind from E&Y; stock down over 5% in afternoon trade

Highlights: 

1. The stock of Hexaware Technologies declined by 5.26% to the low of Rs 228.00 as compared to the previous close of Rs 240.65 in the afternoon trade on BSE

2. Hexaware Technologies is facing a revenue headwind from one of its top clients, Ernst & Young (EY), cited the news report 

After a media report stating that Hexaware Technologies is facing a revenue headwind from one of its top clients Ernst and Young (E&Y), the stock of the company fell over 5% in the afternoon trade on Wednesday.

The stock of Hexaware Technologies declined by 5.26% to the low of Rs 228.00 as compared to the previous close of Rs 240.65 in the afternoon trade on BSE. 

Hexaware Technologies is facing a revenue headwind from one of its top clients, Ernst & Young (EY), The Times of India reported citing people familiar with the matter, as saying. 

The Mumbai-based Hexaware, majority owned by Baring Private Equity Asia, counts EY as a platinum account,  with an annual IT outsourcing exposure of $80 million, about 15% of overall revenue. But this figure has shrunk sharply following a review by EY of its IT strategy, the news report said citing the sources, as saying. 

ALSO READ: Hexaware Tech shares tank 9.5% post Q1 earnings

When the newspaper contacted EY it said that the company regularly reviews its IT strategy and practices to ensure it serves its clients effectively, efficiently and embrace the latest innovations. 

"Following a recent IT strategy review, we are currently transforming how we deliver certain IT services to provide market differentiation for our clients and people. As part of this, there is a consultation underway 
and it would be inappropriate to speculate on the outcome. We are not in a position to discuss ongoing negotiations with vendors or suppliers," the report said quoting EY as saying in a statement.

However, Hexaware Technologies has denied the newspaper report in its filing to the BSE.  

"We refer to the newspaper article titled 'Hexaware's EY revenue dips' appear in in The Times of India on June 14, 2017. Hexaware would like to clarify while the company does not comment on its contract with individual clients, no top-20 client of Hexaware has terminated its relationship with Hexaware in the last 10 years and Hexaware continues to win new projects," cited the company in a filing to the BSE. 

"...Hexaware reiterates and reaffirms its 2017 guidance given at the beginning of the year on its financial performance," it further added. 

At 14:35 hours, the stock of Hexaware Technologies was trading down 2.53% or Rs 6.10 at Rs 234.55 on the BSE.

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