MphasiS drops after poor Q1 earnings

MphasiS lost 4.11% to Rs 377.95 at 11:16 IST on BSE after consolidated net profit fell 5.05% to Rs 180.60 crore on 1.88% decline in net sales to Rs 1563.97 crore in Q1 January 2014 over Q4 October 2013.

The Q1 result was announced after market hours on Thursday, 13 March 2014.

Meanwhile, the S&P BSE Sensex was down 129.39 points or 0.59% at 21,645.22.

On BSE, so far 23,000 shares were traded in the counter as against average daily volume of 20,688 shares in the past one quarter.

The stock hit a high of Rs 393.90 and a low of Rs 375 so far during the day. The stock had hit a 52-week low of Rs 347.70 on 27 June 2013. The stock had hit a 52-week high of Rs 513 on 30 May 2013.

The stock had underperformed the market over the past one month till 13 March 2014, advancing 3.66% compared with the Sensex's 7.83% rise. The scrip had also underperformed the market in past one quarter, gaining 3.02% as against Sensex's 5.11% rise.

The mid-cap IT firm has equity capital of Rs 210.15 crore. Face value per share is Rs 10.

MphasiS' direct business revenues rose 1% quarter-on-quarter (QoQ) or 2.2% net of rupee appreciation in Q1 January 2014 despite being a seasonally weak quarter. Direct business revenue stood at 63% of revenue in Q1 January 2014 against 48% of revenue in Q1 January 2013. Gross profit rose 3.3% QoQ at Rs 415 crore in Q1 January 2014. EBIT margin was at 15% in Q1 January 2014 as against 15.3% in Q4 October 2013. Cash and cash equivalents increased by Rs 159 crore in Q1 January 2014 to Rs 2647 crore.

The company added 11 new clients in Q1 January 2014 of which 10 were in Direct business.

Commenting on the company's Q1 performance, Ganesh Ayyar, CEO, MphasiS said, "We are building an innovation led, high value, specialized and customer focused organization. We firmly believe IT services in its current state would cease to exist in time to come. To deliver greater business value to our clients, we continue to invest in portfolio specialization thereby resulting in improved margins".

MphasiS is a $1 billion global service provider, delivering technology based solutions to clients across the world.

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