Hewlett Packard owned IT firm Mphasis Q1 revenue down
BANGALORE: Hewlett Packard owned IT firm MphasisBSE 0.49 % on Thursday said its revenues for the first quarter fell 3.8% sequentially, mainly because of fewer working days at client firms.
The company's net profits during the three month period fell 11% to Rs 184.4 crore in the quarter ended January 31, from Rs 209 crore in the previous quarter.
Bangalore-based Mphasis, in which HP holds close to 60% stake, said its profit margins during the quarter was at 15.5% compared to 17.4% in the last quarter, broadly in line with analyst estimates.
Over the past few quarters, Mphasis has been trying to reduce its exposure to HP, which is undergoing a large-scale restructuring, including some 29,000 job cuts to save costs.
The company said during the November-January quarter, HP contributed 52% of its revenues, compared with 58% in the corresponding period last year. On the non-HP side, Mphasis reported a 1.1% sequential growth and added 14 new clients during this quarter. Analysts had expected the company's direct business to fall due to client shutdowns in the US and Europe.
"Direct business is gaining traction and we are seeing pipeline building in the US and India," said Ganesh Ayyar, Chief Executive Officer, Mphasis.
During the quarter, Mphasis' business from clients in the banking and capital markets sector fell 10%, compared to a 3% decline in the insurance sector.
In December, Mphasis had acquired US based data analytics firm Digital Risk for Rs 1,100 crore to grow its non-HP business. The company's cash and cash equivalents increased by Rs 170 crore to reach Rs 3,110 crore on 31st January 2013. On Thursday, Mphasis stocks closed at Rs 373, down by 0.65% on the Bombay Stock Exchange.