India's Mphasis beats profit estimates on banking segment deals

Mphasis

23/01/2025 14:56

Jan 23 (Reuters) - Indian software services company
Mphasis  MBFL.NS  posted a bigger-than-expected rise in
third-quarter profit on Thursday, aided by strong deal wins in
its banking segment.
    The company's consolidated net profit grew nearly 15% to
4.28 billion rupees ($49.54 million) for the quarter ended Dec.
31 compared with analysts' expectations of 4.26 billion rupees,
according to data compiled by LSEG.
    Mphasis' quarterly revenue of 35.61 billion rupees was about
7% higher than last year, but missed analysts' estimates of
35.70 billion rupees.
    U.S. client spending in the banking and financial services 
(BFS) segment has been recovering slowly since the Federal
Reserve began its rate easing cycle in September.
    The segment — which accounts for nearly half of Mphasis'
overall revenue — saw an almost 9% revenue growth during the
quarter driven by higher customer spending and gradual recovery
in mortgage business, the company said.
    The company's total contract value (TCV) grew 46% to $351
million during the quarter.
    India's $254 billion IT services sector has been cautiously
optimistic post third quarter results on early signs of a
revival in domestic discretionary spending, after a period of
sluggish growth due to inflationary pressures and geopolitical
uncertainty.
    Indian IT firms, which rely heavily on the U.S. for their
revenue, have also been optimistic about President Donald
Trump's second term, due in part to his proposals of lowering
taxes and removing regulations.
    Mphasis' technology, media and telecom (TMT) segment revenue
grew near 13% during the quarter, driven by continued order
wins.
    Shares of the company closed nearly 4% higher ahead of
results.

($1 = 86.3890 Indian rupees)

 (Reporting by Ananta Agarwal and Ashna Teresa Britto in
Bengaluru; Editing by Sahal Muhammed)
 ((Ananta.agarwal@thomsonreuters.com;))