Discounts doom MphasiS, cloud earnings outlook

Moneycontrol Bureau

Once a star performer among the mid-tier IT companies, MphasiS has been a laggard this year, especially as price discounts given to clients coming via its parent Hewlett Packard (HP) has hurt its earnings in the last few quarters.

The company shocked the market when it reported a 20% drop in net profit and 8% drop in revenue in the November-January quarter. That coupled with drop in disclosure standards (it had stopped reporting some details like average billing rates), led to a sharp de-rating of the stock. The shares have tumbled near 50% this year.

A buzz that HP would buy out minority shareholders and delist MphasiS, more so since the sharp fall in the stock in recent months, has led to some short term upsides on the counter. However, MphasiS has time and again denied delisting plans.

Mphasis