The 17 reports from 5 analysts offering long term price targets
for MphasiS Ltd. have an average target of 1010.80. The consensus estimate
represents a downside of -27.67%
from the last price of 1397.45.
Direct International (DI) revenues were largely stable, while DXC revenue witnessed sharp decline (16% QoQ, CC). EBIT margin contraction was largely led by a sharp fall in While S&M; expenses remained stable (as % of revenue), pressure at the gross margin level was partially offset by G&A; rationalization (~150bp QoQ). While the DXC business (~20% of revenues) is expected to be under pressure in the near term, Direct International should continue to drive overall performance. While MRC of USD250m (up to Sep21) is still due, management expects the DXC In 1QFY21, revenue (USD) / EBIT (INR) / PAT increased by 3%/12%/4% YoY v/s International (DI) revenues were largely stable, while DXC revenue witnessed estimates. EBIT margin contraction was largely led by a sharp fall in utilization While S&M; expenses remained stable (as % of revenue), pressure at the gross margin level was partially offset by G&A; rationalization (~150bp QoQ).
Revenues to witness improving trend led by healthy pipeline Mphasis has major exposure to BFSI (~60% of revenues) and information, communication & entertainment (~15% of revenues), which are relatively less impacted by Covid 19 pandemic vs. travel & hospitality verticals. Further, lower legacy exposure and higher growth in digital technology puts the company in a sweet spot. This resulted in Mphasis seeing increase in new deal wins (up 66% YoY in Q1FY21, 38% YoY in Q2FY21E) of which 79% of TCV is in new generation technology. Further, it has also seen healthy...
Mphasis had an event full year as it tested the company's ability to sustain the tough times (HP/DXC channel revenues grew just 7.7% dragging the overall traction; rest business grew 17%) and deliver growth by focusing on its core strategy of providing efficiency, reducing cost and fulfilling need of clients by bringing T back to IT' through cloud and cognitive technology, Dev opps, Cloud native app dev, legacy modernization, Enterprise Automation, Next gen data etc. Strong digital capabilities led to strong traction both in revenue growth (revenues up 14% in FY20) as well as order...
We've factored flat revenue in FY21 and rebound to +8.8% in FY22 with Direct Core growth at +2.3/13.3%, Digital Risk growth at +12.1/7.4% and DXC-HP at -7.5/+0.6% for FY21/22. Factored margin drop of 120bps for FY21 with EBIT% at 14.8/16.0% for FY21/22. Mphasis trades at an attractive valuation of 11.7x FY22E (vs. 13x 10-yr avg.). Maintain ADD on Mphasis supported by in-line 4Q rev and operating performance. Despite DXC-HP portfolio underperformance & uncertainty, (1) Continuity of strong growth vectors in Direct Core, (2) Industry tailwinds in Digital Risk, and (3) Attractive valuations (11.7x FY22E with FCF yield >10%, Dividend yield >4% and RoIC >25%) support our constructive stance. Our TP of Mphasis is Rs 825, at 12x FY22E EPS.
The company is undertaking various measures for cost rationalisation like lower travel cost and lower discretionary spend. However, subdued revenues in DXC channel and anticipated utilisation pressure in the near term will impact FY21E margins. Hence, we expect FY21E EBIT margins to decline 90 bps YoY to 15.1% and see a recovery in FY22E leading to an...
4QFY20 revenue growth at 1.5% (QoQ, CC) was marginally behind our estimates, as weakness in DXC channel overshadowed the healthy performance in Direct. Direct Core segment has been the growth driver and has seen strong deal In terms of capital allocation, MPHL will maintain its 55-57% payout policy. Maintain Given the uncertainty in the environment, management hinted at a soft outlook on revenue growth. However, the company is confident of maintaining its margins by using levers such as increase in share of Fixed Price Projects, fresher hiring, pyramid rationalization, automation and reduced travel costs etc. Direct Core segment has been the growth driver and has seen strong deal wins, Geography wise, Americas declined 1% QoQ while growth in Europe / RoW grew strong at 8%/9%.
Mphasis (MPHL) reported a satisfactory Q4 on the back of (1) 1.5% QoQ/11.1% YoY CC revenue growth, (2) stable 16.3% EBIT margins, and (3) healthy deal wins.
Strong Results; TCV and Commentary reassures growth Mphasis reported INR Revenue growth of 3.1% QoQ (1.5% QoQ in CC terms) ahead of estimates (1.4%) led by sustained traction in Direct International business (70% of revenue) that grew 2.6% QoQ in CC terms while DXC (26% of revenue) declined by 1% QoQ. OPM margin improved 10bps sequentially to 16.3% (our estm: 16.1%). PAT stood at Rs. 3.5Bn (our estm: 2.9Bn) due to lower tax out go at ~15%. MPHL added strong TCV wins at $201mn (TTM basis: $715mn, up 13%...
The spread of Covid-19 has led to lockdowns in many countries globally and could have adverse economic implications. In addition, the recent fall in crude prices could also have an adverse impact of fiscal health of oil producing countries. As a result, IT companies, which have considerable exposure to verticals such as oil, energy & utilities; banking & capital markets; manufacturing and travel & transport could see an adverse impact from the ongoing crisis. Companies like Wipro, Infosys in large cap and MindTree, NIIT Tech, Sonata software, Cyient, Accelya Solutions among...
3QFY20 revenue growth of Mphasis (MPHL) (4% QoQ, CC) was largely in line with estimates; however, growth within key offerings like Application Development and Maintenance (~61% of revenue) remained tepid. We downgrade our FY20-22E EPS by 5-12%, driven by (a) continued uncertainty in growth trajectory of DXC channel, and (b) adjustments to our Revenue in CC terms grew 4.0% QoQ (v/s est. Growth was driven by Direct International (5% QoQ, CC) while DXC revenues remained largely Mphasis largest vertical, BFS, grew 5% QoQ, while Insurance was up ~6% QoQ. The restructuring that is underway at DXC seems to be impacting revenue growth in the channel. Growth was driven by Direct International (5% QoQ, CC) while DXC revenues remained largely BFS, Mphasis largest vertical grew 5% QoQ, while Insurance grew ~6% QoQ. Even non-core geographies like ROW made healthy contribution to segments reported strong growth (~6% / 15%, QoQ).
Mphasis' growth profile is supported by traction in Direct Core, sustainable recovery in Digital Risk (cross-sell) even as the FY17-19 DXC-HP growth delta fades. Strong deal trajectory (USD 189mn TCV NN in 3Q) largely in new-gen services, strong traction in T2-10 accounts and new logo/Blackstone portfolio (2 logos in T20) are expected to drive growth. Expect 10.3/12.1% USD rev/EPS CAGR over FY20-22E. We maintain BUY on Mphasis following a strong Direct Core-Digital Risk performance. Growth drivers in Direct Core are intact, but DXC-HP risks persist. Our TP of Rs 1,010 values Mphasis at 14x Dec-21E EPS (at 5-yr avg vs. 16x earlier) resetting target valuations to adequately reflect risk-reward.
Mphasis has reported healthy growth in Direct international channel. Growth in this segment is expected to be healthy led by higher deal wins, higher focus on new gen technologies and focus on wining deals upstream. To this end, the company has won a TCV of US$189 million (up 8.6% QoQ) of which US$164 million (or 87%) is in new generation services, which is positive for long term revenue and margin perspective. Considering robust deal wins coupled with improvement in Blackstone portfolio companies (which now contribute 7% will be in double digit in coming years) we expect Direct...
MPHL: Cut to ADD on HP/DXC channel uncertainty. Trade: Imports see a sharp dip, exports steady. KNRC: Strong quarter; revenue guidance cut on project delays. ASBL: Subdued execution, growth to pick up in H2. PNCL: Strong quarter, momentum to continue
Following the strong momentum in DXC over FY17-19 (22% CAGR), growth is now expected to be led by Direct Core supported by (1) Strong deal wins (15% QoQ), (2) Strategic accounts (double-digit growth & market share gains in BFS), (3) New logos (including F100 accounts) and (4) Blackstone channel (5% of Direct core). While we remain positive on Direct Core channel, we lower growth est for DXC-HP segment with increased risk around the new strategic roadmap for DXC (leadership change, business divestment, Virtual Clarity acquisition). Expect USD rev/EPS growth at 10% CAGR over FY19-22E. We maintain BUY on Mphasis following a nearly in-line 2Q. Growth drivers in Direct Core are intact, while DXC portfolio risk has increased. Our TP of Rs 1,140 values Mphasis at 16x Sep-21E EPS
Tepid Q1, New Deal Wins to Drive Revenues Ahead: In Q1FY20, consolidated gross revenues grew 0.7% sequentially (Rs. 20607 Mn). In constant currency terms (CC), revenues were up 2.0% QoQ.
We attended Mpahsis analyst meet where the management highlighted the key growth drivers in direct core & new growth areas in the DXC/HP Channel. Mpahsis management mentioned that speed, flexibility, domain expertise, scalability, solution architecting, strong eco system of alliance partners is helping them to drive sustainable growth. Mpahsis has developed core capabilities in sub-verticals especially in BFSI, where regardless of industry weakness in the segment management maintains its strong outlook for the same. Mpahsis is more focused in wealth management & mortgage services...
