Driven by a recovery in revenue growth, Mphasis reported a 4.6% sequential rise in net profit to ₹423.3 crore for the September quarter. On a year-on-year (YoY) basis, net profit was up by 8%.
The company’s revenue for the same period grew 3.3% quarter-on-quarter (QoQ) and 7.9% YoY to ₹3,536.1 crore. The Bengaluru-headquartered firm also saw an improvement in operating margins, which rose by 40 basis points (bps) QoQ but declined by 10 bps YoY to 15.4%.
“Overall, the trend has been as expected. BFS (Banking and Financial Services) and TMT (Technology, Media, and Telecom) were the two leaders in sequential growth. Almost all verticals showed growth, barring a small decline in one vertical, which is minor (around $1 million),” said Rakesh.
He added that while growth is gradually becoming more visible, the macroeconomic environment remains fluid. “Though the interest rate cycle seems to have peaked, and the election cycle is in full swing, there’s still a lot happening. Our focus, however, has been on execution—converting TCV to revenue. This quarter was all about execution.”
Mphasis won new TCV worth $207 million in Q2, 88% of which came from new-gen services. According to Rakesh, smaller deals, typically ranging between $1 million and $10 million, have been particularly strong, facilitating quick revenue conversion.
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The company’s board also approved further investments of up to €30 million in its wholly-owned subsidiary, Mphasis Europe BV. This investment will help Mphasis Europe BV with the repayment of borrowings, the company said in a regulatory filing with BSE.Additionally, Mphasis announced it had entered into a framework agreement with EDZ Systems to acquire its cybersecurity business, which primarily serves a strategic customer of Mphasis. Rakesh noted that this acquisition is part of a broader vendor consolidation strategy, allowing Mphasis to take over the servicing of this client.
