Mphasis Q1 FY25 results: Net profit rises 2.1% to Rs 404.5 crore

The revenue growth increased by 4.6 per cent on a year-on-year basis to Rs 3,422.5 crore

Midcap IT services firm Mphasis reported a 2.1 per cent year-on-year (Y-o-Y) rise in net profit at Rs 404.5 crore. On a sequential basis, profit was up 2.9 per cent. Revenue growth increased 4.6 per cent Y-o-Y to Rs 3,422.5 crore.

On a sequential basis, the firm’s revenue was marginally up by 0.2 per cent.

The company's share hit a 52-week high at Rs 3,079.2 a piece. The stock price ended at Rs 3,015, up 6 per cent from the previous close. The firm’s stock rallied on strong orders and a margin guidance of 14.6-16 per cent for FY25.

“We are seeing a steady improvement in client demand. And, with the strength of our deal pipeline, we remain cautiously optimistic that this trend will continue to improve in our core markets,” said Nitin Rakesh, managing director (MD) and chief executive officer (CEO), Mphasis.

Total contract value (TCV) wins for the quarter stood at $319 million, of which 84 per cent was in new-gen services, said the company in a press release. In Q4 FY24, it had a TCV of $177 million.

“As artificial intelligence (AI)-enabled platforms are adopted at scale and infused across all deal archetypes and solutions, we continue to witness a strong growth momentum in AI-powered deals by leveraging our ‘Savings led Transformation’ theme,” said Rakesh.

Operating margin for the firm grew 10 basis points (bps) on a quarter-on-quarter (Q-o-Q) basis and declined 40 bps Y-o-Y to 15 per cent in Q1 FY25.

Among verticals, the insurance sector led with a 12.5 per cent growth rate on a yearly basis, followed by technology, media and telecom at 11.4 per cent.

While banking and financial services (BFS) registered minimal growth of 1.1 per cent, the vertical got the biggest share of revenue for the company at Rs 1,630 crore during the quarter.

Geographically, the America region contributed the maximum to the revenue share for the firm. About 81 per cent of revenues for the company clocked in from the region.

On the employee front, the company's headcount dropped by 1,019 to 31,645 employees in the quarter ended June 2024.

Earnings per share (EPS) of the company grew 2.8 per cent Q-o-Q and 1.8 per cent Y-o-Y to Rs 21.4 in Q1 of FY25, said the company.