The Hindu Business Line : MphasiS BFL Q3 net declines to Rs 27 cr

RIDING high on the BPO business and increased customer traction, the MphasiS BFL Group today reported 29 per cent increase in revenues for the third quarter ended December 31, 2004.

The IT solutions provider posted revenues of Rs 191.8 crore during the third quarter compared with Rs 148.6 crore in the same period the previous year. Net profit, however, showed a 5.6 per cent decline at Rs 26.8 crore compared with Rs 28.4 crore the corresponding quarter last year.

On a quarter-on-quarter basis, the group's net profits have shown a 14.9 per cent decline.

For the nine-month period, consolidated revenues stood at Rs 560.59 crore (Rs 421.77 crore), a 33 per cent growth and net profit at Rs 93.66 crore (Rs 73.44 crore).

According to Mr Ravi Ramu, CFO, MphasiS BFL, the decline in net profit is primarily on account of increase in manpower costs. "We have added 230 people on the software services during the quarter and this has escalated costs," Mr Ramu said.

Earlier, in a company analyst call for the quarter ended March 2005 , Mr Jerry Rao, Chairman and CEO, had admitted that the software service business was under pressure for the last two quarters on the earnings side and showing sluggish growth. "This comes primarily from large benches and low-capacity utilisation in two quarters one after the other," Mr Rao had said.

The BPO side has shown steady growth largely due to the Kshema acquisition. The BPO business has recorded revenues of Rs 74.48 crore (Rs 48.32 crore) in the third quarter of 2004.

Mr Ramu told Business Line that the acquisition has helped MphasiS to increase its BPO business in Europe with the company winning four new clients.

"We expect to bag more orders from UK and the Scandinavian countries. We are also looking at BPO acquisitions to strengthen our process service business," said Mr Ramu. During the third quarter , MphasiS bagged thirteen new clients with nine in the software services side.

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