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Thursday, Feb 21, 2002

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MphasiS hopeful of attaining targets

Abhrajit Gangopadhyay
Vishwanath Kulkarni


SOFTWARE services and e-solutions firm MphasiS BFL Ltd expects to maintain the momentum in client acquisition as well as in volume growth in the current quarter, even as pricing pressure chokes scope to hike billing rates, the Chief Financial Officer, Mr Ravi Ramu, has said.

The firm which added eight new clients in its December quarter reported a volume growth in the range of 12-14 per cent.

While efforts with healthcare giants such as Pfizer and Johnson & Johnson are on the upswing, the company is awaiting a critical mass for this segment to shape up before hiving it off into a separate domain. Currently, healthcare engagements come under MphasiS' retail vertical.

Maintaining that there was "tremendous'' pressure on the rates, Mr Ramu said that improvement in the blended rates could be possible only through increasing incidence of systems integration projects.

The firm reported that its onsite rates grew by $3 to $60 in the December quarter of the current fiscal. However, offshore rates registered a drop of $1 sequentially in the December quarter.

The firm was witnessing a drift towards offshore engagements, Mr Ramu said. MphasiS reported that 46 per cent of its December-quarter revenue came from offshore efforts, up 100 basis points from the September quarter.

However, he did not detail any expected onsite-offshore break-up in the firm's revenue for the current fiscal.

Meanwhile, the firm which issued a guidance of 25-30 per cent earnings growth for fiscal 2002-03, sees its software development services growing "over 10 per cent'' in the next fiscal, while the call-centre subsidiary is likely to report 200 per cent growth.

Cost rationalisation and increasing utilisation rates would help MphasiS to protect its gross-margins at over 40 per cent in the current quarter, Mr Ramu said. The firm reported a gross margin of 41.6 per cent in its December quarter.

MsourcE, which is expected to report cash break-even in the current quarter, was likely to be in the black by the middle of next fiscal, Mr Ramu said.

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