Mphasis Share Price

Mphasis Reports Strong Q2 Performance with 8% Profit Growth Amid Revenue Challenges

Mphasis, the Bengaluru-based IT services firm, has made headlines recently by reporting an impressive 8% increase in its net profit for the second quarter of FY25. The company’s net profit rose to Rs 423.3 crore, up from Rs 391.95 crore in the same period last year, demonstrating resilience in a challenging market landscape.

Recent Stock Performance

On October 17, Mphasis shares saw a notable uptick, advancing 4.38% to reach Rs 2,920 on the National Stock Exchange (NSE). This boost came on the heels of the company’s latest financial results, which revealed a mixed bag of performance metrics that intrigued investors.

Revenue Challenges

While the profit figures were promising, Mphasis reported a 7.92% decline in revenue from operations, totaling Rs 3,536.14 crore compared to Rs 3,276.5 crore in the previous year’s quarter. This decline was slightly offset by the revenue of Rs 3,422.46 crore recorded in the April to June period of FY25, indicating that the company is navigating a complex business environment.

Despite the revenue drop, Mphasis achieved a total contract value (TCV) of $207 million in new deals during Q2 FY25. Notably, a remarkable 88% of these wins came from new-generation services, highlighting the company’s strategic focus on innovation and modernization in its service offerings.

Operating Margin and Earnings Per Share

The operating margin for Mphasis stood at a solid 15.4%, reflecting effective cost management and operational efficiency. Additionally, earnings per share (EPS) rose by 4.6% sequentially and 7.7% year-on-year, reaching Rs 22.4 crore in Q2 FY25. This upward trend in EPS indicates a positive return for shareholders, even amid revenue fluctuations.

CEO’s Insights

Nitin Rakesh, the CEO and Managing Director of Mphasis, provided insight into the company’s current standing and future direction. He emphasized that despite ongoing challenges, the macro environment is trending positively. “We are witnessing increased AI adoption across clients to address enterprise challenges with higher efficiency and accuracy, beyond cost advantage,” he stated. Rakesh pointed out that the company’s “savings-led transformation thesis” is at the core of its deal structures and solutions, significantly enhancing service delivery and cost savings for clients.

Strategic Investments

In a significant move to bolster its European operations, Mphasis announced a €30 million equity infusion into its wholly-owned subsidiary, Mphasis Europe BV. This investment, scheduled for completion by the end of FY25, aims to assist in the repayment of borrowings and strengthen the subsidiary’s financial position. Such strategic investments underscore Mphasis’s commitment to expanding its footprint in the European market.

Conclusion

Mphasis has demonstrated a strong performance in Q2 FY25, showcasing an 8% rise in net profit amid revenue challenges. Mphasis Share Price, The company’s focus on new-generation services and AI adoption reflects its commitment to staying ahead in the competitive IT landscape. As Mphasis continues to navigate market dynamics, its strategic investments and operational efficiency will play a critical role in driving future growth.