Mphasis Q2 Results Review - Operating Performance Inline; Muted Deal Booking: Centrum

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Centrum Broking Report.Mphasis Ltd. reported inline performance for the quarter. Both, revenue and Ebit margin were as per estimates. It reported revenue of Rs 35.4 billion (up 3.3% QoQ in INR terms, up 2.7% QoQ in USD terms). Segment-wise, BFS grew by 3.6% QoQ, Insurance grew by 2.3% QoQ, technology, media and telecom grew by 6% QoQ; while logistics and transportation was down 1% QoQ. Direct now contributes 95.8% ( flat in % contribution QoQ) of revenue ,while DXC contributes 2.7% of revenue. Ebit margin increased by 39 bps QoQ to 15.4%, led by control on direct costs. New total contract value win was at $207 million ( with 88% of deal wins in New Gen Services) versus $319 million in Q1 FY25. Offshore revenue mix was down 20 bps QoQ to 42.7%. Total headcount was down 44 employees QoQ to 31,601 employees. Cash and equivalents of Rs 31.7 billion versus Rs 43.1 billion as of June-2024. It is witnessing some pickup in TCV to revenue conversion with some increase in short duration deals. Deal pipeline remains strong, well distributed across verticals, with 35% being AI led deals. Management has guided for Ebit margin of 14.6% to 16% band for FY25. It is witnessing higher traction in Generative AI solutions with significant number of AI solutions going mainstream. We expect revenue/Ebitda/profit after tax to grow at 11.5%/12.1%/14.0% over FY24-FY27E. We have revised our FY25E/FY26E/FY27E EPS by (0.9%)/(1.3%)/NA. We roll over to Sep’26 estimates for valuation and maintain Reduce rating on the stock with revised target price of Rs 3,103 (versus Rs 2,957 earlier) at PE of 27 times on Sep’26E EPS..Click on the attachment to read the full report:.Mphasis Q2 Results: Net Profit Rises 4.6%, Revenue Up 3%.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Mphasis Q2 Results Review - Operating Performance Inline; Muted Deal Booking: Centrum

The near term demand environment remains challenging as discretionary tech spending has been muted, says the brokerage.

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