Mphasis Q2 Results: Strong Growth, Positive Outlook (7.92% YoY Revenue, 8.01% Profit Increase)

Mphasis Q2 Results: Strong Growth, Positive Outlook (7.92% YoY Revenue, 8.01% Profit Increase)

Mphasis Q2 results strong

Mphasis Q2 Results Overview:

On October 16, 2024, Mphasis announced its Q2 results, highlighting a strong financial performance with a year-over-year (YoY) revenue growth of 7.92% and an 8.01% increase in profit.

Quarterly Performance:

– Compared to the previous quarter, revenue rose by 3.32%, while profit increased by 4.65%, indicating consistent improvement in the company’s financial health.
– Selling, General, and Administrative (SG&A) expenses decreased by 0.98% quarter-over-quarter (q-o-q), although they grew by 2.77% YoY, reflecting the company’s efforts toward operational efficiency.

Operational Highlights:

– Operating income improved by 5.99% q-o-q and 7.43% YoY, demonstrating effective operational management and strong revenue generation capabilities.

Earnings Per Share (EPS):

– For Q2, the EPS reached ₹22.18, representing a 7.57% increase YoY, which may be a positive signal for shareholders.

Stock Performance:

– In the past week, Mphasis saw a return of 0.42%, with a remarkable 26.14% return over the last six months and a 6.26% year-to-date return, indicating strong market performance.

Market Capitalization:

– Mphasis currently has a market capitalization of ₹55,073.63 crore, with a 52-week high of ₹3,187.8 and a low of ₹2,069.1, showing significant valuation fluctuations throughout the year.

Analyst Consensus:

– As of October 17, 2024, the outlook among 27 analysts covering Mphasis is mixed. Of these, 2 analysts have rated the stock as a Strong Sell, 7 as Sell, 7 as Hold, 7 as Buy, and 4 as Strong Buy.
– The overall recommendation remains a Hold, suggesting that while Mphasis exhibits promising growth, analysts are exercising caution given current market conditions.

Mphasis Q2 Results: Strong Growth In the second quarter (Q2), Mphasis reported total revenue of ₹3,536.15 crore, reflecting a 3.32% increase compared to ₹3,422.46 crore in the first quarter (Q1) and a year-over-year (YoY) growth of 7.92% from ₹3,276.5 crore.

Selling, General, and Administrative (SG&A) expenses amounted to ₹2,014.01 crore, which is a decrease of 0.98% from ₹2,034.03 crore in Q1, but an increase of 2.77% YoY from ₹1,959.75 crore. Depreciation and amortization costs were ₹103.56 crore, down 1.39% from ₹105.01 crore in Q1, while showing a substantial YoY increase of 16.39% from ₹88.97 crore.

Total operating expenses reached ₹2,991.83 crore, rising by 2.85% from ₹2,908.92 crore in Q1 and by 8.01% YoY from ₹2,769.84 crore. Operating income was reported at ₹544.32 crore, up 5.99% sequentially from ₹513.54 crore and up 7.43% YoY from ₹506.66 crore.

Net income before taxes stood at ₹562.57 crore, marking a 4.70% increase from ₹537.32 crore in Q1 and a 7.84% rise from ₹521.66 crore YoY. The net income for the quarter was ₹423.33 crore, which reflects a 4.65% increase from ₹404.51 crore in the previous quarter and an 8.01% increase from ₹391.95 crore in the same quarter last year.

The diluted normalized earnings per share (EPS) was ₹22.18, representing a 4.38% increase from ₹21.25 in Q1 and a 7.57% rise compared to ₹20.62 YoY.

Mphasis Q2 Results: Strong Growth Mphasis Ltd. reported a 4.6% sequential increase in net profit for the quarter ending in September, with net profit reaching ₹423 crore compared to ₹404 crore in the previous quarter, as stated in an exchange filing. Revenue also rose by 3.3% to ₹3,536 crore, up from ₹3,422 crore in the second quarter of fiscal 2025. Operating profit, or EBIT, grew by 6% to ₹544 crore, compared to ₹514 crore in the prior quarter, and the EBIT margin improved from 15% to 15.4%, falling within the targeted range of 14.6% to 16%.

The total contract value (TCV) for the quarter was $207 million, which included three significant deals secured during this period. The company noted that these TCV wins were diverse across various sectors, client types, and strategic customers, with an increased pace of revenue conversion.

In terms of segment performance, income from the banking and financial services sector rose by 3.6% sequentially to ₹1,689 crore. Revenue from the technology, media, and telecom segment increased by 6% to ₹582 crore, up from ₹549 crore. The insurance segment saw a 2.3% increase in income to ₹387 crore, while growth in the logistics and transportation sector remained flat at ₹464 crore.

Mphasis Q2 Results: Strong Growth Mphasis’ board has approved an investment of up to 30 million euros in its wholly-owned subsidiary, Mphasis Europe BV, which is expected to be completed by the end of March 2025. This funding will assist Mphasis Europe BV in repaying its borrowings. Mphasis, based in Bengaluru, is a multinational information technology service and consulting firm that offers infrastructure technology and application outsourcing services, along with architecture guidance, application development, integration, and management services.

Recently, the company appointed Ajay Arya, an industry veteran, to lead its mergers and acquisitions department. Arya will be based in New York and will oversee the entire process, including strategy, evaluation, deal sourcing, negotiation, due diligence management, and post-merger integration.

On Wednesday, Mphasis shares closed down 0.3% at ₹2,920 each, mirroring a 0.3% decline in the Nifty 50 index. Over the past year, the stock has increased by 27% and by 6% year-to-date. According to Bloomberg data, among the 35 analysts tracking the company, 15 have a ‘buy’ rating, 10 recommend a ‘hold,’ and 10 suggest a ‘sell.’ The average 12-month price target for the stock is ₹2,989, indicating a potential upside of 2.7%.