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Despite a much weaker Rupee, Mphasis, the ‘renegade’ offshore services business 60% owned by HP, saw EBITDA margins shrink by nearly two points to 17.8% in the FY closing 31st Oct. Headline revenues grew by 8% to Rs58bn, (c. $1bn) while pre-tax profit fell by 3% to Rs10bn (c. $175m).
As has been the case for some time, the proportion of revenues deriving from HP customers is in decline, falling by 16% over the year, and now represents just 40% of the total. In contrast, revenues from ‘direct’ clients grew by 38%, accounting for 42 of the 76 new logos opened in the year.
I regularly harp on about HP management’s failure (albeit not assisted by Mphasis’ management dogged aim to declare UDI) to make more of Mphasis (see Mphasis declares itself to be Indian and work back). OK, Mphasis added a useful $80m to HP’s bottom line but it’s leverage ought to be so much greater.
