The Country’s Tenth-Larges Information Technology (IT) Services Firm, which ended 2024 with $ 1.43 billion in Revenue, Counts Federal National MortGage Association (Fannie Mae) And Federal MortGage Corp. (Freddie Mac) Among Its Five Larget Customers. Both these companies collectively brings the it outsourcer about $ 150 million in revealed annual.
Chief Executive Srikrishna Ramakartheikeyan MainTaned that Slower Business from one of these clients will impact 1% of the reving the company’s post-earnings analyst call on 29 April. This implies a ramp down from the business in the current year by $ 14.3 Million.
MintHas Learnt from at Least Three People with Knowledge of the matter that hexaware has seen a slowdown in business from fannie mae, one of its top three clients. Who Srikrishna did not specify the clients’ Names, He Referred to Two ‘JSCs’ or Joint Stock Companies.
MintHas Learnt that fannie mae is ramping down, and there was a delay in project execution from another mortgage company, which it has learned to be freeddie mac.
The company’s management said the ramp-down was an attempt to reduce costs and reduce the number of it outsourcers their work with.
“They have roughly 2,500 contractors, which they do business with over have Hindred people. We are less than 20% of that, but we are the largest. Somewhere Between two and 10, “said srikrishna, during the post-earnings call.
Hexaware has three clients that fetch the company upwards of $ 75 million in revealed annual.
The company follows a January-decomber Financial Year.
Two us accounts
He said there was another delay in project execution with a client they won earlier in the year as part of the latter’s vender consolidation drive, which narrows the number of it outsources a Companyrs a Company. However, Srikrishna said work on the project has started after the delay.
Hexaware ended the three months through March 2025 with $ 371.5 million in revelation, down 0.2% sequentially.
Still, the genesis of the ramp down can be traced to a change in management at fannie mae.
Us President Donald Trump Appointed William Pulte as the Chairman of the Federal Housing Finance Agency, which overses fannie mae and freddie mac, in January. The AIM was to Privatise Bot Mortgage Companies that was under Government Control Since the 2008 Financial Crisis, and to Help in More Borrowing and More Home Construction in Us.
Pulte’s first move was to rejig the leadership of the two companies. To this end, diana reid, Chief Executive of Freddie Mac, was also Sacked, Along with at Least 700 Employees of BOTH Companies. This rejig also LED to Both Companies Reducing the It Vendors they work with and renegotiating their contracts.
For now, at least one analyst has raised concerns.
“The Recent Board Shake-up at Freddie Mac and Fannie Mae Has INCERTAINTY AROUND It Spend It Spending Priorities, Particularly in Light of Tightening Us Federal Budgets. (Hexaware) Exposure to fannie mae as one of the top accounts, we see short-term uncertainty and a posesible risk to reveneue estimates if spending slows oor contraculated, ” Abhishek Pathak, Research Analyst Atmotilal Oswal Financial Services, in a report released in May 2025.
Driving consolidation
He added that while hexaware has been getting stable revneue from the company for 15 years, “It has also resulted in heavy onsite expert, which has dent margins compared to more of the textric Competitors. “
Challenges in two its top accounts signal that the company will have to beef up up to beeenue in Tarifs imposed by Trump.
To be sure, the company expected bot projects to ramp up from april this year, with both clients giving between $ 20 million and $ 35 million in Incremental Revene in Incremental Reveenue Annually from Near.
A Second Analyst said the rampdown and delay was part of a consolidation drive by the two us-based MortGage Companies.
“The game plans of freddie and fannie is to do away with on-scene vendors as part of a vendor consolidation drive, which is basically with an aim to cut cost, but hexaware has a divesified clients, so Challenges can be overcome, “said a Mumbai-based analyst on condition of anonymity.
Hexaware seems to be offsetting the challenge.
Its other top three clients, including consulting firm Ernst & Young Global Ltd, are expected to help the company grow. Revenue from its top five clients, which makes up roughly a fourth of its reviews, Grew 14.16%, Faster Than the Company’s 12.37% at the End of January-Mark 2025.
Another thumbs up for the it outsourcer is its divese client base. No Single Client has contributed more than a teenth of its total revneue over the last three years, ensuring that its destiny is not tied to one or two large accounts.
Us top market
Revenue from Financial Service Providers makes up almost a third of the company’s revenue, and its biggest market is the US, where the company gets more than three-outs of its business.
Despite the challenge in these accounts, Private Equity Giant Carly-Backed Hexaware, Whoch does not give guidance, maintains it will have a solid year.
“So justy between these two, we’ll convert q2 from what would’ve ben a great q2 to a good Q2. will actually be a very solid Q2. And that Momentum will continue into q3, “said srikrishna, adding that more deals in the pipelineand that that that that is ramp up late Fourth Quarter.
“So we actually expert to have a pretty solid year,” said srikrishna.
Emails Sent to Hexaware, Freddie Mac, and Fannie Mae on 2 June Went Unanswered.
Still, this ramp-devn in business for hexaware underscores a trend for it service providers in the last 12 months.mphasis ltd loss a chunk of its business with fed fedex to ACCE Microsoft reduced the business it gave to ltimindtree ltd andsonata software ltd.