Under fire from shareholders and analysts, MphasiS finally disclosed the break-up of its first quarter(November-January) revenues, but maintained that the decline in revenues was not because of price cuts alone.
MphasiS shares were trading at Rs 460, up 2% over the previous close, after touching an intra-day high of Rs 469.45. The stock has fallen around 27% over the last one week after the company announced its quarterly earnings on February 24, with revenues declining 8.5% quarter-on-quarter. Analysts tracking the stock said HP, the parent of MphasiS and also its single largest client, paid lower rates for the business given during the quarter. In an interview to CNBC-TV18 today, MphasiS Chief Executive Officer and Director Ganesh Ayyar said that business from HP had become sluggish and so the company had done "selective pricing intervention" with its parent. Ayyar cautioned that HP's enterprise system business would continue to be sluggish. "MphasiS will not drop rate card with HP," he said. MphasiS said the 8.5% sequential decline in its dollar revenues in Q1 was 3.5% due to fewer working days in the quarter, 3% due to a milestone-related payment in its previous quarter, 1% because of currency fluctuation, and only 1% due to the pricing reduction. The break-up of the quarterly revenues reveals that revenues from application services fell 9.5% quarter-on-quarter, revenues from IT outsourcing fell 6.4%, and revenues from business process outsourcing fell 5.4%. Ayyar said the company's cash surplus would be used for acquisitions, share buyback or buying property. Below is a verbatim transcript of Ganesh AyyarDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
