Mphasis Q1 Review - Exceptional Performance In Direct Business: Motilal Oswal
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Motilal Oswal Report
Mphasis Ltd.’s Q1 FY22 performance was led by 9.8% constant currency q-o-q growth in the direct business, while the DXC vertical (less than 10% of revenues now) declined once again (down 18.1% q-o-q constant currency).
The Ebit margin remained stable (down 20 basis points q-o-q), as increased hiring was compensated by lower selling, general and administrative costs.
It reported the highest ever total contract value of $505 million in Q1 FY22 (including $250 million announced on the Q1 FY22 call).
With the Mphasis management reiterating its guidance for industry-leading growth in the direct business, we expect the standout growth in direct to continue (26% y-o-y in FY22E) – led by the acceleration of deal wins (up 62% on last twelve months basis).
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