Hexaware failed to sustain the higher levels on Wednesday after being propped up of late by operators and funds.

The scrip of the Atul Nishar group company slipped 0.48 per cent to Rs 154.90 on BSE in about two hours of trading. It came off after rising as much as 3.6 per cent to Rs 161.25, earlier. Around 1.53 million Hexaware shares were traded on BSE.

The stock has been witnessing brisk activity on the bourses of late amid hectic buying by operators. Funds are believed to have mopped up the stock as well.

The increased activity by operators comes following the proposal to include the scrip in the derivatives segment.

Thursday last week, the Securities and Exchange Board of India approved the list of additional scrips for the derivatives segment. The list included Hexaware. NSE proposes to start derivatives trading in the 25 additional stocks from 31 January 2003.

The stock has surged 32 per cent from Rs 117.75 on 6 January 2003 to Rs 155.60 on 14 January 2003. Staggering volumes accompanied that rise (average daily volumes topped 4.127 million shares on BSE in six days).

These kind of volumes were witnessed on the counter only in mid-September 2002. From a low of Rs 41.25 on 31 July 2002, the scrip has gained 277 per cent to Rs 155.60 on 14 January 2003.

The stock has largely been driven higher by rumours that the company has bagged a BPO order and over expectations of strong December 2002 quarterly results.

The new Hexaware Technologies (HTL) was formed from the merger of the software division of Aptech with a privately owned existing IT company of the promoter (Atul Nishar group), Hexaware Technologies.

Thus, HTL is now purely an IT company as against the earlier hybrid nature of Aptech, which included IT as well as the IT education business. The IT education business was transferred to a separate company, Aptech Education (which was subsequently listed on the bourses).

Earlier, in August 2002, HTL signed a long-term agreement with Deutsche Leasing AG, Germany, to assist in the restructuring and modernisation of the latter's European IT operations. Deutsche Leasing is one of Germany's largest and most prosperous leasing companies.

It belongs to Sparkassen-Finanzgruppe, one of Europe's most successful financial services organisations, and has recorded revenues of euro 3.5 billion in fiscal year 2000-01. The initial value of the contract is estimated at euro 22 million, which is to be completed by December 2004.

HTL posted a net profit of Rs 2.34 crore (Rs 23.4 million) for the quarter ended 30 September 2002, as against Rs 0.56 crore (Rs 5.6 million) in the corresponding period last fiscal. The total income was Rs 21.34 for the quarter ended 30 September 2002, compared to Rs 25.16 crore (Rs 251.6 million) in the quarter ended 30 September 2001.

Local mutual fund Prudential ICICI is believed to have been an active buyer on the counter of late.

At the current Rs 154.90, the scrip discounts its historical Q3 September 2002 annualised EPS of Rs 4.20 by a PE multiple of 36.8.