Shares of information technology services company Mphasis Ltd. rose over 4% after it announced its Q1FY27 results on Thursday. The stock opened 0.65% to trade ar Rs 2,247 and then gained further.
Mphasis' consolidated revenue rose 3.3% quarter-on-quarter to Rs 4,384 crore in Q1, compared with Rs 4,243 crore in the preceding quarter.
However, profitability weakened during the quarter. Consolidated Ebitda declined 1.3% sequentially to Rs 795 crore from Rs 805 crore, while the Ebitda margin contracted to 18% from 19% in the previous quarter. Net profit fell 3.9% quarter-on-quarter to Rs 490 crore, compared with Rs 510 crore in the March quarter.
During the post-results conference call, the management attributed the pressure on first-quarter EBIT margins to the initial ramp-up costs associated with recently secured deals and the impact of acquisitions. The company nevertheless offered an optimistic near-term outlook, stating that Q2 was expected to deliver its best constant-currency revenue growth in three years.
In a concall, the management also maintained its FY27 growth guidance of high single digits to low double digits, supported by an all-time-high deal pipeline and improving demand in key business segments. Artificial intelligence has emerged as a significant component of Mphasis' opportunity pipeline. Management said AI-related deals had increased from about 12% of the pipeline to nearly 70%.
"Enterprise AI is the gap we are filling," the management said, adding that the company's platform-led strategy was validating faster than initially projected.
Mphasis said operating cash flow was expected to remain at around 80% of net income, indicating continued focus on cash conversion despite investments in deal ramp-ups and acquisitions.
Mphasis Ltd. Share Price Today
Mphasis Ltd. Share Price Today
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The scrip rose as much as 4.82% to Rs 2,340 apiece intraday on Friday. It pared gains to trade 2.2% lower at Rs 2277.60 apiece, as of 9:35 am. This compares to a 0.88% fall in the NSE Nifty 50 Index.
It has fallen 13.87% in the last 12 months and 18.12% year-to-date. Total traded volume so far in the day stood at 0.59 times its 30-day average. The relative strength index was at 38.20.
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