HP business steady at Mphasis

The proportion of revenues that Bangalore-based offshore services firm Mphasis derived from its majority owner, HP, held steady last quarter, at 58%. Nonetheless, this still represented a 3% revenue decline qoq, primarily due to project ramp-downs. However, the proportion of revenues Mphasis derives from HP’s non-Enterprise Services customers grew by 17% qoq and now accounts for nearly 8% of the total. Mphasis’ headline revenues fell back again in Q2 (to 30th April), by 3% to Rs13.3b (c.$245m), but operating margins improved by 120bps qoq to 16.2%, though were still 30bps down yoy.

Mphasis management is doing a creditable job keeping focus while its parent ponders the meaning of life. They are desperately trying to reduce the company's dependence on HP by boosting ‘direct’ client business. This is probably in the best interests of its other shareholders, though surely rather defeats the aim of the original exercise when (then) EDS acquired majority control almost exactly six years ago.