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Result Review
Mphasis
Mphasis reported dismal set of numbers for 1QFY2011 with revenue declining by 8.5% qoq
to US $271mn. In INR terms, revenue stood at `1,233.5cr, down 8.3% qoq. The company
recorded decline across all its verticals with banking and capital markets and information
technology, communication and entertainment falling by 11.1% and 9% qoq, respectively.
Even the insurance and emerging industries vertical registered a qoq decline of 5.7% and
4.7%, respectively. EBITDA margin slipped by 274bp qoq to 20.9% with major gross margin
fall of 560bp qoq in information technology, communication and entertainment, followed by
emerging industries at 460bp qoq and insurance at 260bp qoq. PAT came in at `2,26.7cr,
reporting a 20% qoq decline.
We believe the disappointing results reported by the company are a result of pricing
renegotiations with HP, which were due in November 2010. We await management’s
commentary for further clarity. Meanwhile the stock is under review and we may revise our
Target Price of `864 downwards post the conference call.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Result Review
Mphasis
Mphasis reported dismal set of numbers for 1QFY2011 with revenue declining by 8.5% qoq
to US $271mn. In INR terms, revenue stood at `1,233.5cr, down 8.3% qoq. The company
recorded decline across all its verticals with banking and capital markets and information
technology, communication and entertainment falling by 11.1% and 9% qoq, respectively.
Even the insurance and emerging industries vertical registered a qoq decline of 5.7% and
4.7%, respectively. EBITDA margin slipped by 274bp qoq to 20.9% with major gross margin
fall of 560bp qoq in information technology, communication and entertainment, followed by
emerging industries at 460bp qoq and insurance at 260bp qoq. PAT came in at `2,26.7cr,
reporting a 20% qoq decline.
We believe the disappointing results reported by the company are a result of pricing
renegotiations with HP, which were due in November 2010. We await management’s
commentary for further clarity. Meanwhile the stock is under review and we may revise our
Target Price of `864 downwards post the conference call.
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