IT company Mphasis's Q2 net profit rises 8% Y-o-Y, deal value falls

Company says most of its contracts are now for work in artificial intelligence

Mphasis, the midcap information technology company, on Thursday reported a net profit of Rs 423.3 crore for the second quarter of the financial year (Q2 FY25), growing 8 per cent year-on-year (Y-o-Y). Sequentially, profit was up 4.7 per cent.

Revenue in Q2 FY25 came in at Rs 3,536 crore up, rising 7.9 per cent Y-o-Y and 3.3 per cent quarter on quarter (Q-o-Q).

“Despite many ongoing challenges, the macro environment continues to trend in the right direction. We are witnessing increased AI (artificial intelligence) adoption across clients to address enterprise challenges with higher efficiency and accuracy, beyond cost advantage. Savings-led transformation thesis is core to all our deal archetypes and solutions, thus significantly enhancing service delivery and savings for clients,” said Nitin Rakesh, chief executive officer and managing director of Mphasis.

The company in Q2 FY25 won new deals with total commercial value (TCV) of $207 million, with 88 per cent of deal wins in the so-called NewGen Services. TCV was down 18.8 per cent Y-o-Y, compared to $255 million in Q2 FY24. TCV was down 35 per cent sequentially, compared to $319 million in Q1.

The company’s investor presentation said three large deals were signed in Q2 and six in the first half of FY25. It added that 35 per cent of its deal pipeline is AI-led.

Operating margins in Q2 FY25 came in at 15.4 per cent. Banking and finance segment was up 8 per cent Y-o-Y, insurance 11.8 per cent, technology, media and telecom 2 per cent, and logistics and transportation increased 5.2 per cent.

Mphasis announced it will invest Euro 30 million in its European subsidiary to repay borrowings.