ICICI Direct: Mphasis’ Robust Deal Wins In Q1, Improving Outlook

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Direct Report.Mphasis Ltd.’s Q1 reported 4.6% QoQ fall in revenues in constant currency terms and margins declined 60 basis points to 15.7%. However, the company has seen robust deal wins in the quarter with 66% YoY growth in new deal total contract value (TCV) to 259 million U.S. dollars. In addition, it has also signed 216 million U.S. dollar deal in July 2020 which will be reflected in Q2 FY21E. Further, the company has also seen healthy client addition of one client in 75 million U.S. dollar and three in 1 million U.S. dollar bucket. In addition, the company has guided margins of 15.5%-16.5% for FY21E.The company is undertaking various measures for cost rationalisation like lower travel cost and lower discretionary spend. In addition, healthy revenue traction and improvement in utilisation will further drive company’s margins in coming quarters. Hence, we expect FY21E Ebit margins to increase 20 basis points YoY to 16.2% and see a further improvement in FY22E leading to an improvement of approximately 40 basis points YoY to 16.6%..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ICICI Direct: Mphasis’ Robust Deal Wins In Q1, Improving Outlook