Earnings Outlook
Banking, tech verticals to drive Mphasis Jan-Mar sales
This story was originally published at 21:39 IST on 23 April 2025
Register to read our real-time news.Informist, Wednesday, Apr. 23, 2025
By Arya S. Biju
MUMBAI – Strong growth in the banking and financial services and technology, media, and telecommunications verticals, a ramping up of large deals, and the impact of the reversal of furloughs are expected to drive Mphasis Ltd.’s top-line growth for the March quarter. The company's operating margin, on the other hand, is expected to remain largely unchanged within its target band, according to analysts.
The information technology services provider is expected to report a consolidated net profit of INR 4.38 billion, up 2.4% on quarter, according to the average of estimates from 18 brokerages. Motilal Oswal Financial Services Ltd. gave the highest estimate for the company’s net profit at INR 4.52 billion, while HDFC Securities Ltd. gave the lowest estimate of INR 4.17 billion.
The company’s consolidated revenue for the quarter is expected to rise over 4% sequentially to INR 37.04 billion, according to estimates. Antique Stock Broking had the highest estimate for the company’s consolidated revenue at INR 37.37 billion and Indsec Securities and Finance had the lowest estimate of INR 36.30 billion.
The March quarter is expected to be the fifth successive quarter of growth in net profit and seventh quarter of growth in revenue for the company. On a year-on-year basis, the company’s bottom line is expected to rise 11.4% while the top line is expected to rise nearly 9.0%.
In dollar terms, the company is expected to report a revenue of $427.70 million, according to an average of estimates from 13 brokerages. The company had reported a revenue of $419.00 million for the December quarter, up 0.2% sequentially and 4.6% on year in constant currency terms. Analysts expect the company’s revenue in constant currency terms to grow in the range of 2.5-3.2% sequentially.
The company's banking and financial services vertical and insurance vertical are expected to expand in the March quarter, driven by the gradual recovery in the mortgage business, Motilal Oswal said in its earnings preview report. However, growth in the logistics and transportation vertical is expected to be soft due to the absence of new deals to replace project completions, ICICI Securities said.
Its operating margin, calculated as earnings before interest and tax margin, is expected to be in the range of 14.9-15.5% for the March quarter, according to estimates from 13 brokerage. These estimates are within the company’s target band of 14.6%-16.0%. In its post-earnings analyst call in January, the company had said it was aiming to sustain its margin within this target band. For the December quarter, the company’s operating margin had dropped by 10 basis points to 15.3%.
The company will announce its Jan-Mar earnings Thursday. Investors will watch out for the management's commentary on the impact of macroeconomic concerns on the company and its clients, the pace of demand recovery in the insurance and technology verticals, and updates on capital allocation and cash distribution. Investors will also watch out for the management's commentary on the order pipeline, deal wins, and outlook for revenue and margin in the financial year 2025-26 (Apr-Mar).
On Wednesday, shares of Mphasis closed at INR 2,507.30 on the National Stock Exchange, up 4.4%. The stock has fallen nearly 17% since the announcement of its December quarter earnings on Jan. 23 and over 31% from its all-time high of INR 3,659.75 hit on Oct. 19, 2021.
Following are the Jan-Mar earnings estimates for Mphasis based on reports from 18 brokerages, in descending order of the estimate of net profit:
| Brokerage | Net Sales | Net Profit | EBITDA | Revenue ($ million) | EBIT margin (in %) |
| ------in INR million----- | |||||
| Motilal Oswal Financial Services Ltd. | 37,343.00 | 4,524.00 | 7,058.00 | 430 | 15.4 |
| Nuvama Wealth Management Ltd. | 37,018.00 | 4,491.00 | 6,780.00 | -- | -- |
| Choice Equity Broking Pvt. Ltd. | 36,607.00 | 4,483.00 | -- | -- | 15.5 |
| ICICI Securities Ltd. | 37,340.00 | 4,466.00 | -- | 431 | 15.2 |
| Anand Rathi Share and Stock Brokers Ltd. | 37,088.00 | 4,461.00 | -- | -- | -- |
| Equirus Securities Pvt. Ltd. | 37,136.00 | 4,460.00 | -- | -- | -- |
| Kotak Institutional Equities | 36,998.00 | 4,426.00 | 6,928.00 | 431 | 15.5 |
| InCred Research Services Pvt. Ltd. | 37,148.00 | 4,414.00 | -- | 430 | 15.2 |
| Prabhudas Lilladher Pvt. Ltd. | 36,700.00 | 4,400.00 | -- | 428.4 | 15.4 |
| Elara Securities (India) Pvt. Ltd. | 36,825.00 | 4,394.00 | -- | 428 | -- |
| Antique Stock Broking Ltd. | 37,366.00 | 4,385.00 | -- | 430 | 15.3 |
| HSBC Global Research | 37,118.00 | 4,365.00 | -- | 429 | 15.5 |
| PhillipCapital (India) Pvt. Ltd. | 37,254.00 | 4,345.00 | -- | 429 | 15.2 |
| JM Financial Institutional Securities Pvt. Ltd. | 37,262.00 | 4,309.00 | 7,015.00 | 432 | 15.2 |
| Indsec Securities and Finance Ltd. | 36,300.00 | 4,300.00 | -- | 400 | 15.3 |
| Emkay Global Financial Services Ltd. | 37,289.00 | 4,273.00 | 7,010.00 | -- | -- |
| Nirmal Bang Equities Pvt. Ltd. | 36,655.00 | 4,180.00 | -- | 431 | 14.9 |
| HDFC Securities Ltd. | 37,310.00 | 4,170.00 | -- | 431 | 15.3 |
| Average | 37,042.06 | 4,380.33 | 6,958.2 | 427.7231 | -- |
End
US$1 = INR 85.42
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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