MUMBAI: Shares of IT services provider, Mphasis Ltd, gained over 6% after the firm reported a 32.7% year-on-year (YoY) rise in its consolidated net profit to ₹353.2 crore for the March quarter. The company's net profit was at ₹266.1 crore in the year-ago period.
At 12:30 pm, shares traded at ₹838.5, up 4.3% from its previous close, while the benchmark index, Sensex fell 0.6% to 30,948.29. Mphasis has increased 30.4% from its March lows of ₹641.60, while the Sensex has advanced 8.5% in the same period.
The company registered total contract value (TCV) wins worth $201 million in direct international business during the quarter, of which 79% was in the new-generation services.
"The digital risk business could grow in FY21 along expected lines. Order wins continue to lend visibility on the direct channel business, though management believes that it may be in a better position to provide visibility in the next 3-4 weeks as it addresses the supply side challenges related to covid-19,"said Emkay Global Financial, which has a hold rating with a tad upside.
The company's revenue from operations grew 15.8% to ₹2,346.1 crore in the quarter, from ₹2,024.9 crore in the year-ago period.
However, Motilal Oswal Financial Services said the deal wins worth $201 million suggest a healthy order book, high exposure to relatively stable verticals and new client additions will help the stock navigate these challenges.
The brokerage firm has upgraded Mphasis FY21/22 earnings per share (EPS) by 8% and 6%, respectively, largely driven by adjustments to exchange rate assumptions and earnings before interest tax (Ebit) margin estimates over FY21/22. Motilal Oswal has a neutral rating on the stock.
"This year the company recorded the highest ever total contract value (TCV) wins in direct international business, as well as strong earnings growth and it is focused on strengthening its position through this period of uncertainty by staying close to clients and enabling them to accelerate their digital transformation journey during these challenging times," said Nitin Rakesh, chief executive officer and executive director, Mphasis.