The year 2021 has delivered a large number of multibagger stocks. Shares of Mphasis Limited have more than doubled investors’ money so far in 2021. In comparison, the Nifty 50 index gained over 26 percent and the S&P BSE Sensex index rose over 24 percent.
┬а
This multibagger stock has surged from Rs 1,531 to Rs 3,301 mark. It has gained 116 per cent since the beginning of this year and risen 138 per cent in the last one year.
Shares of Mphasis rose 3 per cent to hit an all-time high of Rs 3,267.95 on BSE after the company announced that it has acquired US-based design consultancy Blink Interactive Inc for a total consideration of $94 million, including earnouts. In a filing, Mphasis said that the acquisition is expected to provide access to marquee logos, strengthen experience business and will be revenue growth accretive.
тАЬThe Total Addressable Market for the upstream user research, strategy and design is growing 25-30 per cent p.a. i.e., 4-5x the overall IT Services market. There is significantly increased focus on customer/ user centered design in the current environment. The synergy opportunity set will revolve around product, experience and service design, as well as the end-to-end implementation services across the spectrum of clients and industries we service together,тАЭ said Nitin Rakesh, CEO and Executive Director at Mphasis.
The stock opened 0.19 per cent higher at Rs 3,205.15 against the previous close of Rs 3,199.00. With a market capitalisation of Rs 61,340 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
According to MarketsMojo, the company has a low Debt to Equity ratio (avg) at -0.29 times. Also, it has high management efficiency with a high ROE of 17.58%. It noted that the company has high institutional holdings at 39.26%
Also, the technical trend has improved from Mildly Bullish on September 3, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, DOW and OBV. However, the valuation seems to be expensive right now.
The company reported a net profit of Rs 339.69 crore for the quarter ended June 2021 compared to a profit of Rs 275.12 in the year-ago period. Revenue from operations grew 18 per cent to Rs 2,690.83 crore in the June-ended quarter against Rs 2,288.21 crore a year ago. The EPS of the company has increased to Rs 18.16 in June 2021 from Rs 14.75 in June 2020.
“We believe that direct core business will deliver industry-leading growth in FY22 (28%) due to 1) sustained strong deal momentum with longer tenure and larger deal size 2) robust broad-based pipeline, 3) market share gains driving consistent growth across client buckets (Top 10 clients grew 24% YoY and Top11-20 clients grew 19% YoY on TTM basis) and 4) Strong presence across sub-verticals in BCM industry (51% of revenue share, +9.2% QoQ USD in 1Q22 and 20% YoY on TTM basis),” said Prabhudas Lilladher.
Motilal Oswal noted that the ability to win multiple large digital transformation deals proactively and in vendor consolidation scenarios indicates strength in its sales and delivery capabilities.
