The Hindu Business Line : MphasiS Q1 net dips as BPO revenues fall

MPHASIS BFL Ltd reported a lower net profit of Rs 9.02 crore for the first quarter this fiscal, compared to Rs 12.79 crore in the same period last fiscal. Quarter on quarter profits fell from Rs 21.32 crore in the fourth quarter of 2004.

During the quarter, revenues touched Rs 63.32 crore compared to 66.14 crore in the same period last year. It was Rs 56.92 crore in the last quarter of the previous year. The services business showed good traction though revenues from the BPO business declined compared to the sequential previous quarter as well to the corresponding previous period, mainly due to a decline in average billing rates and dip in revenues from banking and financial service vertical, according to the company.

"We have had good volume growth all round and billing rates have remained stable," said Mr Jerry Rao, Chairman and CEO. "While BPO business has been flat during the quarter, we have a strong pipeline which will stand us in good stead over the years. Overall, (this has been) a good quarter with a positive outlook for the rest of the year."

The company also announced the integration of its acquisition - Kshema Technologies and the US healthcare outsourcing firm, Eldorado Computing and London-based Princeton Consulting.

MphasiS said it added 16 clients during the quarter, 13 in its software operations and three in its back-office services business. Group operating margins were sustained in the sequential quarter despite annual salary increases coming into effect in the current quarter, said Mr Ravi Ramu, CFO. Improved margins came with increased utilisation levels, higher volumes in IT services and favourable hedging strategies.

"The next couple of quarters will see results of favourable hedging strategy continuing," Mr Ramu said.

MphasiS has seen offshore volumes grow 17 per cent QoQ, while onsite volumes went up by 4 per cent. Offshore utilisation rates in IT services went up to 73 per cent. Group revenues stood at Rs 219.70 crore for the quarter.

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