Hexaware Technologies Declares Second Interim Dividend of Rs 9.50 Per Share

Hexaware Technologies has declared a second interim Dividend of Rs 9.50 per equity share of face value Rs 1 each for the financial year 2026. The dividend represents 950 per cent of the share’s face value.

The board approved the payout through a circular resolution passed on October 20, 2026. October 26, 2026, has been fixed as the record date for determining eligible shareholders, while payment is scheduled to be made on November 7, 2026.

The announcement is relevant because it signals continued shareholder distribution even as the IT services company invests in AI-led offerings, delivery capabilities and newer service areas such as legacy modernisation, Zero License and AI-enabled business transformation. The filing, however, does not disclose the aggregate cash outgo from the dividend, making it difficult to assess the precise impact on cash reserves or payout ratio.

Hexaware’s capacity to support shareholder payouts is underpinned by a cash-generative operating model. In CY2025, consolidated operating cash flow stood at Rs 1,739.1 crore, compared with profit after Tax of Rs 1,368.3 crore. Cash and cash equivalents were Rs 1,970.8 crore as of December 31, 2025, while the company had no material consolidated interest-bearing borrowings identified in the extracted balance sheet data.

At the same time, the company’s near-term earnings trajectory remains more important than the dividend itself. In Q2CY26, net sales rose 17.9 per cent year-on-year to Rs 3,845.2 crore, supported by growth in Healthcare and Insurance, Manufacturing and Consumer, and Banking. However, reported profit after tax fell 13 per cent year-on-year to Rs 330.2 crore, and PAT margin declined to 8.6 per cent.

Management has reduced its CY2026 revenue growth guidance to 6-7 per cent, including the contribution from a rebadging deal, citing delayed ramp-ups and a more challenging macro environment. While deal momentum in AI, outsourcing and transformation services remains encouraging, conversion of those wins into revenue and margins will remain the key operating test over the coming quarters.

What This Means for Investors

The second interim dividend is a constructive capital-allocation signal, particularly because Hexaware continues to pursue an AI-led transformation strategy that requires investment in platforms, talent and client delivery. Its CY2025 operating cash flow of Rs 1,739.1 crore exceeded reported profit after tax of Rs 1,368.3 crore, indicating that the business has historically generated cash that can support both operating needs and shareholder distributions. However, the filing does not disclose the total payout, so investors cannot yet quantify its effect on cash balances or assess the dividend against annual earnings.

For the investment case, the announcement is modestly supportive rather than thesis-changing. It offers evidence of financial flexibility but does not resolve the more material issue of earnings conversion. Q2CY26 revenue growth was strong, yet profit after tax and margins weakened, while management’s revised 6-7 per cent CY2026 growth outlook reflects delayed deal ramps. Sustained improvement in profitability from AI-led and transformation contracts will matter more for investor perception than the dividend alone.

Disclaimer: The article is for informational purposes only and not investment advice.