Shares of Mphasis fell nearly 5 per cent in Friday’s trade after the IT firm reported a lower-than-expected results for the September quarter.
At 1.20 pm, the scrip was trading at Rs 2,048.75, down 4.58 per cent. With this, the scrip has lost 40 per cent in 2022 so far.
Mpahsis said its net profit for the quarter rose 22.55 per cent YoY to Rs 418.46 crore in the September quarter compared with Rs 341.46 crore in the corresponding quarter last year.
Net sales for the quarter rose 22.67 per cent to Rs 3,519.82 crore for the quarter compared with Rs 2,869.23 crore in the year-ago quarter..
Mitul Shah, Head of Research at Reliance Securities called the September quarter numbers ‘subdued’.
He said Mphasis Q2 performance was below his estimates, across all parameters.
“Additionally, DXC business continues to witness a slump. In our view, a substantial reduction in the volatile part of business (DXC) is encouraging for a consistent growth. Considering decent revenue growth, strong deal pipeline, new order wins and reducing contribution from volatile business of DXC,” Shah said while suggesting a target of Rs 2,630 on the stock.
In an investor presentation, Mphasis said two-third of its clients believe IT services spending may increase in 2023 despite macro headwinds.
Changing deal models may influence outsourcing spends, the IT firm said, adding that 65 per cent of customers believe vendor consolidation is a high priority.
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