MphasiS Q3 net dips 8% to Rs 192.6cr on wage hike

IT services firm MphasiS today said its consolidated net profit declined by 7.7 percent to Rs 192.6 crore in the third quarter ended July 31 on account of wage hikes.

The Hewlett Packard-owned company posted a net profit of Rs 208.7 crore during the same quarter last year, MphasiS said in a statement here. MphasiS follows a November-October financial year.
However, on sequential basis, net profit grew 9.1 percent from Rs 176.5 crore in the February-April 2012 period. The company has hiked salaries by 5-7 percent for offshore employees and 2-3 percent for onsite staffers, which had a 200 basis point impact on bottomline, MphasiS Chief Executive Officer Ganesh Ayyar told PTI.
MphasiS' revenues, however, grew 11 per cent to Rs 1,539.8 crore in the reported quarter from Rs 1,405.3 crore in the May-July 2012 period and 9.7 percent sequentially (Rs 1,422.7 crore in February-April 2013 quarter).
"Our net profit for the quarter grew 9.1 percent sequentially despite a 160 bps increase in effective tax rates to 26.7 percent. Operating margins also expanded 110 bps to 15.8 percent. We believe we have lifted the game with our numbers and will continue to grow," Ayyar said.
During Q3, the firm's banking and capital markets business grew 70.1 percent Y-o-Y to Rs 618.7 crore and that from insurance vertical rose 11.3 per cent to Rs 179.3 crore.
Revenues from Americas, which accounted for 74 percent of the topline, grew 28.4 percent. Revenue from EMEA (Europe, Middle East and Africa) and India, however, decreased by about 4 percent and 44 percent, respectively.
Ayyar said the company is witnessing good traction in the demand and added 16 clients in the quarter. "We see more demand for emerging technologies around mobility, cloud and analytics. Though demand for traditional services continues, clients today are actively looking at newer technologies."
MphasiS added 100 employees during the quarter, taking its total headcount to about 39,000 people. Asked if MphasiS was looking at acquisitions, Ayyar said it would target companies in the emerging technologies space.
"We would look at small-sized companies, around USD 30 million, but only if they are a right fit." The numbers were announced after market hours. Shares of MphasiS today rose 2.92 per cent to Rs 420.05 apiece on the BSE.