Hinduja Global Solutions (NSEI:HGS) - Share price, News & Analysis

HGS fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	1/6
Financial Health	5/6
Dividends	3/6

HGS Stock Overview

Hinduja Global Solutions Limited provides business process management services in the United States, Canada, Europe, India, and internationally.

Rewards

Trading at 32.2% below our estimate of its fair value

Risk Analysis

Dividend of 11.86% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results

Profit margins (0.09%) are lower than last year (6%)

Hinduja Global Solutions Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Hinduja Global Solutions
Historical stock prices
Current Share Price	₹1,037.65
52 Week High	₹1,960.00
52 Week Low	₹846.00
Beta	0.86
1 Month Change	14.80%
3 Month Change	-3.76%
1 Year Change	-15.70%
3 Year Change	225.23%
5 Year Change	299.33%
Change since IPO	255.88%

Recent News & Updates

Mar 30

Should You Be Adding Hinduja Global Solutions (NSE:HGS) To Your Watchlist Today?

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling...

Shareholder Returns

	HGS	IN IT	IN Market
7D	8.9%	3.5%	0.1%
1Y	-15.7%	-5.1%	-1.7%

Return vs Industry: HGS underperformed the Indian IT industry which returned -4.3% over the past year.

Return vs Market: HGS underperformed the Indian Market which returned -2.5% over the past year.

Price Volatility

Is HGS's price volatile compared to industry and market?
HGS volatility
HGS Average Weekly Movement	5.2%
IT Industry Average Movement	7.1%
Market Average Movement	6.9%
10% most volatile stocks in IN Market	9.8%
10% least volatile stocks in IN Market	4.5%

Stable Share Price: HGS is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: HGS's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1973	21,608	Partha DeSarkar	https://hgs.cx

Hinduja Global Solutions Limited provides business process management services in the United States, Canada, Europe, India, and internationally. It provides consumer facing services, such as consumer engagement, work at home, HGS work cloud solutions; business process optimization solutions, such as back-office, human resources outsourcing, and B2B services; and contact center transformation solutions, such as cognitive contact center, and contact center for analytics and intelligence. The company also offers digital solutions, including digital experience, automation, analytics, and cloud services; and healthcare services, such as enrollment, member engagement management, mailroom automation, provider and broker, and custom solutions consulting services.

Hinduja Global Solutions Fundamentals Summary

How do Hinduja Global Solutions's earnings and revenue compare to its market cap?
HGS fundamental statistics
Market Cap	₹43.16b
Earnings (TTM)	₹30.63m
Revenue (TTM)	₹32.64b

1,409x

P/E Ratio

1.3x

P/S Ratio

Is HGS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HGS income statement (TTM)
Revenue	₹32.64b
Cost of Revenue	₹25.23b
Gross Profit	₹7.41b
Other Expenses	₹7.37b
Earnings	₹30.63m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.73
Gross Margin	22.69%
Net Profit Margin	0.093%
Debt/Equity Ratio	0.04%

How did HGS perform over the long term?

See historical performance and comparison

Dividends

11.9%

Current Dividend Yield

16,718%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is HGS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HGS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HGS. This is calculated by dividing HGS's market cap by their current preferred multiple.
What is HGS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹43.16b

HGS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.3x
Enterprise Value/EBITDA	4x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does HGS's PS Ratio compare to its peers?

HGS PS Ratio vs Peers

The above table shows the PS ratio for HGS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	1.9x

Forward PS

Price-To-Sales vs Peers: HGS is good value based on its Price-To-Sales Ratio (1.3x) compared to the peer average (1.9x).

Price to Earnings Ratio vs Industry

How does HGS's PE Ratio compare vs other companies in the Indian IT Industry?

Price-To-Sales vs Industry: HGS is good value based on its Price-To-Sales Ratio (1.3x) compared to the Indian IT industry average (2.8x)

Price to Sales Ratio vs Fair Ratio

What is HGS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HGS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1.3x
Fair PS Ratio	n/a

Price-To-Sales vs Fair Ratio: Insufficient data to calculate HGS's Price-To-Sales Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of HGS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: HGS (₹1037.65) is trading below our estimate of fair value (₹1530.72)

Significantly Below Fair Value: HGS is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate HGS's PEG Ratio to determine if it is good value.

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Future Growth

How is Hinduja Global Solutions forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.2%

Forecasted Software industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Hinduja Global Solutions has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether Hinduja Global Solutions is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
Hinduja Global Solutions competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has Hinduja Global Solutions performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

12.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HGS has a large one-off loss of ₹773.0M impacting its March 31 2022 financial results.

Growing Profit Margin: HGS's current net profit margins (0.09%) are lower than last year (6%).

Past Earnings Growth Analysis

Earnings Trend: HGS's earnings have grown by 12.4% per year over the past 5 years.

Accelerating Growth: HGS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HGS had negative earnings growth (-99.1%) over the past year, making it difficult to compare to the IT industry average (38.6%).

Return on Equity

High ROE: HGS's Return on Equity (0.04%) is considered low.

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Financial Health

How is Hinduja Global Solutions's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: HGS's short term assets (₹59.7B) exceed its short term liabilities (₹16.2B).

Long Term Liabilities: HGS's short term assets (₹59.7B) exceed its long term liabilities (₹2.9B).

Debt to Equity History and Analysis

Debt Level: HGS has more cash than its total debt.

Reducing Debt: HGS's debt to equity ratio has reduced from 49.1% to 0.04% over the past 5 years.

Debt Coverage: HGS's debt is well covered by operating cash flow (17030.6%).

Interest Coverage: Insufficient data to determine if HGS's interest payments on its debt are well covered by EBIT.

Balance Sheet

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Dividend

What is Hinduja Global Solutions's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

11.86%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: HGS's dividend (11.86%) is higher than the bottom 25% of dividend payers in the Indian market (0.44%).

High Dividend: HGS's dividend (11.86%) is in the top 25% of dividend payers in the Indian market (1.92%)

Stability and Growth of Payments

Stable Dividend: HGS's dividend payments have been volatile in the past 10 years.

Growing Dividend: HGS's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (16717.7%), HGS's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (145.3%), HGS's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure

CEO

Partha DeSarkar (58 yo)

no data

Tenure

₹173,182,554

Compensation

Mr. Partha DeSarkar serves as the Global Chief Executive Officer of Hinduja Global Solutions Limited and served as its Manager until September 4, 2019. Mr. DeSarkar serves as Executive Director of Hinduja...

CEO Compensation Analysis

Compensation vs Market: Partha's total compensation ($USD2.21M) is above average for companies of similar size in the Indian market ($USD272.05K).

Compensation vs Earnings: Partha's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: HGS's management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: HGS's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/23 00:00
End of Day Share Price	2022/06/23 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31