Mphasis' direct revenues now the majority

HP is still its majority (60%) owner despite the recent media frenzy (see Shifting sands in the Indian IT sector), but Bangalore-based (and Mumbai-listed) Mphasis now derives less than half its revenues from its increasingly distant parent. Headline revenues for Q2 (to 30th April) grew nearly 12% qoq to Rs14.1bn (c. $260m) of which 54% derived from Mphasis' direct channel, the first time that this has exceeded revenues from HP's customers. However, Direct revenues were boosted by the recent acquisition of Florida-headquartered mortgage-related risk, compliance and transaction management software firm, Digital Risk (see here); organically Direct revenues declined 5.2% qoq vs 'only' a 1.8% qoq decline in the HP channel.

HP's share of Mphasis' stock is currently worth a little over $1bn on which it is earning roughly a 7% net return. Mphasis also gives HP access to 33k offshore 'heads' to help with global delivery.  It just seems a shame that HP can't seem to find a way to make more of Mphasis. But to do that it needs to own more of Mphasis – in fact all of it. But that looks like it will never happen.