Mphasis Q2 net profit up 8% YoY, operating margin dips marginally

For the quarter ended September 30, 2024, the company reported an operating margin of 15.4%, which is marginally lower than the 15.5% operating margin in the corresponding period last year.

Mphasis’ earnings per share (EPS) for the quarter was up 7.7% YoY to ₹22.4.

During the quarter the company saw new total contract value wins of $207 million, of which 88% of the contracts were for the company’s new-gen services.

The company’s banking & financial services vertical grew 7.2% YoY to $202 million. The insurance vertical clocked in growth of 9.5% to $147 million while the TMT vertical saw marginal growth of 0.8%. The logistics & transportation vertical climbed higher by 3.7% YoY while other segments were up 3.2%.

Mphasis reported that in Q2FY25 the company saw broad-based pipeline growth across verticals with the US pipeline growing 28% YoY. The company also reported that 35% of its pipeline is AI-led. Further, the BFS pipeline jumped 43% YoY while non-BFS saw growth of 11% YoY.

Nitin Rakesh, chief executive officer and managing director at Mphasis, said, that the company faced several challenges but the overall macro trend remains positive. The rapid AI adoption by clients has helped support the company and its clients.

“We are witnessing increased AI adoption across clients to address enterprise challenges with higher efficiency and accuracy, beyond cost advantage. Savings led transformation TM thesis is core to all our deal archetypes and solutions, thus significantly enhancing service delivery and savings for clients,” he said.

Shares of the company have risen by nearly 10.3% since the beginning of the year. The stock has gained over 32% in the past year.