The Hindu Business Line : MphasiS Q1 net drops 55 pc to Rs 15 cr

The MphasiS BFL Group has reported a 55 per cent drop in its consolidated net profit, while its revenues grew 19 per cent for the quarter ended June 30, 2006, over the corresponding period last year.

The company registered a net profit of Rs 15.16 crore on revenues of Rs 260.68 crore for the first quarter of fiscal 2007 compared to a net of Rs 33.7 crore on revenues of Rs 219.7 crore in the first quarter last year. On a sequential basis, the revenues were up by 4.1 per cent while the net profit was down by 23.8 per cent.

"This has been a challenging quarter for us with cost increases from salary hikes eroding our margins," said Mr Jerry Rao, CEO, MphasiS. "Further, this was aggravated by the slow-downs at front-end due to the long process around the open-offer," he said.

"However, Mr Rao said: "we are positive about the company's outlook especially given the fact that we are now part of the larger EDS Group and expect the benefits of the alignment to start flowing through soon."

Mphasis shares closed 1.8 per cent higher on the BSE at Rs 157.45 after touching an intra-day high of Rs 162.40.

The Mphasis board recently approved the merger of EDS India with itself effective April 1, 2006. The financials of both companies can be consolidated only after the necessary shareholders and regulatory approvals were received, Mphasis said.

EDS would be declaring its financial results later this week. "We are not in a position to provide the results of EDS India for the June quarter at this stage," Mphasis said in a press release.

For the year ended March 31, 2006, EDS India reported a net profit of Rs 42.2 crore on revenues of Rs 322.3 crore.

During the June quarter, the IT services revenues grew by 24 per cent year-on-year to Rs 147.93 crore. However, this growth has been offset by the somewhat subdued BPO business. BPO revenues grew by about 8.6 per cent to Rs 77.91 crore.

On a sequential basis, the IT services revenues were up 6 per cent. Mphasis added 12 new clients including two in BPO business. The total headcount stood at 11,234 as of June 30.

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