Mphasis Shares Gain Most In Four Weeks Despite Q4 Earnings Miss

Shares of Mphasis Ltd. rose the most in four weeks as the company's Ebitda beat analyst estimates, despite declining in the fourth quarter of fiscal 2023.

The company's March quarter revenue was down 4.14% to Rs 3,361.2 crore, compared with Rs 3,506.2 crore in the previous quarter in the same fiscal. It missed the consensus analyst estimates pooled by Bloomberg, which stood at Rs 3,514.8 crore.

The consolidated net profit declined 1.69% sequentially to Rs 405.3 crore, compared to Rs 447.4 crore in the third quarter of the same fiscal. It missed the consensus analyst estimates, which stood at Rs 416.9 crore.

Mphasis Q4 FY23 (Consolidated, QoQ)

• Revenue down 4.14% at Rs 3,361.2 crore vs. Rs 3,506.2 crore (Bloomberg estimate: Rs 3,514.8 crore).

• Ebit down 3.05% at Rs 574.9 crore vs. Rs 593.2 crore (Bloomberg estimate: Rs 538.8 crore).

• Ebit margin at 17.11% vs. 16.92% (Bloomberg estimate: 15.33%).

• Net profit down 1.69% at Rs 405.3 crore vs. Rs 447.4 crore (Bloomberg estimate: Rs 416.9 crore).

• The board declared a final dividend of Rs 50 per share for the fiscal ended March 31.

Mphasis Ltd. highlighted in its investor presentation that it rounded off a mixed FY23, marked by duality in business segments. The direct growth in fiscal 2023 was higher by 12% year-on-year, despite pronounced mortgage weakness and delayed conversions in the second half of the fiscal.

Shares of Mphasis Ltd. advanced 1.45% to Rs 1,809.85 apiece, compared to a 0.01% advance in the benchmark NSE Nifty 50 as of 9:53 a.m. on Friday.

The stock gained 5.70% intraday, the most since March 31. Total traded volume stood at 3.3 times its 30-day average. The relative strength index was 48.7.

Out of the 36 analysts tracking the company, 19 maintain a 'buy' rating, 11 recommend a 'hold,' and six suggest to 'sell' the stock, as per Bloomberg data.

The average calculated from the 12-month price target given by analysts implies a potential upside of 14.1%.