Shares of Mphasis Limited (MPHL) rose 5.46 per cent to hit an all-time high of Rs 3001.65 on BSE on Monday. This multibagger stock has surged from Rs 1,198 to Rs 3,001.65 mark today in the last 12 months – yielding around 150.5 per cent in this period. An amount of Rs 5 lakh invested in this logistics stock a year ago would have turned into Rs 12.52 lakh today.
With a market capitalisation of Rs 53,707.13 crore, the share stands higher than 5 day, 10 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 June 10, 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 have had a great start to FY22 with record deal wins of USD 505 million in our direct business, the highest ever in the history of Mphasis. We are focused on staying consistent with our performance while continuing to keep our clients’ transformation needs at the center of our strategy and execution,” said Nitin Rakesh, Chief Executive Officer and Executive Director, Mphasis.
“The investments we have made in our business model over the years have been driving growth and differentiation for us and our financial performance for the quarter is the result of it,” he added.
Motilal Oswal expects margins to improve in FY22 (+40bp YoY) and see MPHL performing near the upper end of its guidance of 15.5–17%, aided by operating leverage and lower exposure to DXC.
“We raise our estimates by 2%/5% for FY22/FY23,factoring in higher growth in the Direct business. Despite the DXC overhang, with strong digital capabilities and client relationships, MPHL is well-positioned to be a key beneficiary in the current context,” the brokerage house added.
It further added that the ability to win multiple large digital transformation deals proactively and in vendor consolidation scenarios indicates strength in its sales and delivery capabilities.
“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.