25 Oct , 2021 By : Kanchan Joshi
Mpahsis Ltd (Mphasis) offers application services, BPO and infrastructure services BFSI, Technology, communication & logistic services. For the second quarter ended September, the IT company reported muted Q2FY22 results on profitability.
The company's dollar revenues increased 6% on a sequential basis (QoQ) to $385.2 million. On the other hand, its adjusted (to one-off costs) margins were down 10 basis points (bps) quarter-on-quarter.
Mphasis’ share price has grown by around 7x over the past five years (from around Rs445 in October 2016 to around Rs3,254 levels in October 2021). The multibagger stock has surged around 110% this year (year-to-date) so far, whereas, it has rallied 136% in a year's period. From Rs1,356 apiece, the stock currently trades around Rs3,207 per share.
The recent run up in price has prompted brokerage and research firm ICICI Securities to maintain Hold rating on the stock and sees further upside on the IT stock. It has a target price of Rs3,420 per share with a target period of around twelve months.
The IT service provider's strategy to mine top 10/20 clients, adding high potential new logos, increase in deal sizes & expansion in Europe bodes well for long term growth could act as key triggers for future price performance, as per the brokerage.
"Further, management stability, improving deal size, market share gains via vendor consolidation, low legacy exposure and exposure to lesser impacted vertical to drive 25 percent CAGR growth in direct revenues in FY21-23E and improving revenue trajectory, higher offshoring, pricing, and automation to boost margins," the note further added.
0 Comment