DBT Bureau
Bengaluru, 26 July
Mid-tier IT services firm Mphasis expects gradual recovery in discretionary spend, supporting its revenue growth in the coming quarters.
In the investor presentation, the company said it is likely to post above industry growth rate in the current financial year (FY25).
“(We see) signs of gradual recovery in mortgage. (We) expect to post above industry growth, gaining from tech-led, account-focused strategy,” the company said in its investor presentation of Q1 performance.
In the first quarter, the company posted a 2.1%rise in its consolidated net profit at Rs 404 crore for the June quarter. Its revenue from operations rose 4.6% year-on-year basis to Rs 3,422 crore. On a constant currency basis, the topline grew 0.1%over the previous quarter.
“We are seeing a steady improvement in client demand, and with the strength of our deal pipeline, we remain cautiously optimistic that this trend will continue to improve in our core markets,” CEO of Mphasis, Nitin Rakesh said in an exchange filing.
The total contract value (TCV) stood at $319 million during the first quarter, of which 84% were in the new-generation services. Deal pipeline was up 17% over the previous quarter. The company said its conversion of TCV to revenue continues to improve.
Operating margin of the IT firm grew 10 basis points (bps) on a sequential basis and declined 40 bps to 15 per cent in the first quarter. “(We) target sustainable operating (EBIT) margin within stated band of 14.6% – 16%,” the company said in its investor presentation.
Among verticals, while BFSI (Banking, Financial Services, Insurance) grew 1.1% YoY to Rs 1,630 crore, while the Technology, Media, and Telecom segment grew over 11% to Rs 5,490 crore. The sequential growth in the key BFSI segment encouraged investors about a likely revival. Mphasis’ share price closed 6% up at Rs 3,017.65 on Friday post announcement of its Q1 results.
