Mid-tier IT solutions company Mphasis on October 20 reported a consolidated net profit of Rs 391.9 crore for the September quarter, down 6.3 percent from the year-ago period. On a sequential basis, net profit was down 1 percent.
Mphasis' revenue from operations also fell 6.5 percent YoY to Rs 3,276.5 crore. On a quarter-on-quarter basis, topline grew 0.8 percent. Both topline and bottomline numbers were in line with analyst estimates of Rs 3,252 crore and Rs 396 crore, respectively.
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On a constant currency basis, revenue remained flat QoQ and declined 10.1 percent YoY, the company said in an exchange filing. The operating margin at 15.4 percent remained flat sequentially. Delayed start to revenue conversions impacted Q2, said the company.
"We are seeing signs of bottoming out, thanks to stability in mortgage and visibility to growth given the sustained pipeline expansion and contract closures that are starting to gain momentum," Nitin Rakesh, chief executive officer and managing director, Mphasis said.
New total contact (TCV) win came in at $255 million, of which 70 percent were in the new gen services. The company recorded $707 million worth of TCV in the June quarter.
"We are focused on establishing a path of AI acceleration with our full-fledged Mphasis.ai business unit, with key GTM along with solutioning AI partnerships to make the most of this opportunity," he added.
Mphasis results follow the trend of poor showing by largecap IT services companies. Tata Consultancy Services, Infosys, HCL Technologies, Wipro and LTIMindtree — saw a muted quarter due to demand slowdown, macroeconomic headwinds and weak discretionary spending.
Rakesh sees signs of stabilisation and some pick-up in pipeline conversion to revenue. Further, he believes that there is higher scrutiny around discretionary spending. “Expected growth to be back-ended in FY24. Mortgage revenue declined a bit, but not as much as before,” he said.
Mphasis said its earnings per share declined 1.1 percent sequentially and 6.6 percent YoY to Rs 20.8 in Q2 FY24.
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