Jul 14, 2001|
Mphasis: Slowing down
Mphasis BFL for the 1QFY02 has posted a 17% sequential (QoQ) drop in topline and a 16% drop in bottomline. On a YoY basis the company has shown a 7% growth in revenues and 213% growth in net profits. The operating margins too have declined by 250 basis points.
Despite the significant decline in revenues (sequentially) the company's operating margins have not come down drastically as the software development expenses and administrative expenses have declined compared to 4QFY01 by 10% and 37% respectively.
|Operating Profit (EBDIT)
|Operating Profit Margin (%)
|Profit before Tax
|Profit after Tax/(Loss)
|Net profit margin (%)
|Amortisation of goodwill
|Diluted number of shares
|Diluted Earnings per share*
1. 1 US$ = Rs 46.5
2. Expenditure includes amortisation of stock compensation expenses
# Consolidated numbers based on US GAAP
Earlier, the company had indicated that it would not be able to meet its guidance for FY02, which was in the range of US$ 100 m (consolidated numbers). At its board meeting on June 15, 2001 Mphasis indicated that its topline growth would be in line with the industry leaders. According to the consolidated results as per US GAAP the revenues have declined by 15% compared to 4QFY01. However, on a YoY basis the topline has grown by 8%. As per the US GAAP the company posted losses due to amortisation of goodwill. Excluding the same, the company posted profits of US$ 0.7 m (Rs 25 m). This translates to a 29% growth sequentially. However, Mphasis had a relatively significant other income component, excluding which the profits would have dipped. The Indian operations of the company for which the figures are given, contributes to 58% of the consolidated revenues in 1QFY02.
At a current market price of Rs 201, the stock is trading at a P/E multiple of 11 times its FY01 annualised earnings.
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