Dear All,
Forwarding you the Update on Mphasis :
Mphasis has released the results of its different business segments and average realisation rates for 1QFY2011, which was previously discontinued owing to the company’s revised organisational structure. However, post a weak 1QFY2011performance and corporate governance issues, this data has now been released by the company.
For1QFY2011, Mphasis reported 8.3% qoq decline in overall revenues to `1,233.5cr. According to the newly released segment-wise performance, revenues of the application services vertical declined by 9.5% qoq to `790.5cr, with gross profit coming at `194.6cr. Revenues of the ITO services vertical came in at `290.2cr for the quarter, down 6.4% qoq, with gross profit coming in at `104.9cr. The BPO services vertical reported a 5.4% qoq decline in revenues to `152.8cr, with gross profit coming at `24.1cr.
Segment-wise performance
| (Rs cr) | 1QFY11 | 4QFY10 | 1QFY10 | % chg qoq | % chg yoy |
| Application services | |||||
| Revenue | 790.5 | 873.7 | 809.6 | (9.5) | (2.4) |
| Gross profit | 194.6 | 270.3 | 272.1 | (28.0) | (28.5) |
| Gross margin (%) | 24.6 | 30.9 | 33.6 | (632)bp | (899)bp |
| ITO services | |||||
| Revenue | 290.2 | 310.2 | 197.1 | (6.4) | 47.2 |
| Gross profit | 104.9 | 108.2 | 65.3 | (3.0) | 60.6 |
| Gross margin (%) | 36.1 | 34.9 | 33.1 | 127bp | 302bp |
| BPO services | |||||
| Revenue | 152.8 | 161.5 | 184.9 | (5.4) | (17.4) |
| Gross profit | 24.1 | 28.1 | 33.2 | (14.2) | (27.4) |
| Gross margin (%) | 15.8 | 17.4 | 18.0 | (163)bp | (218)bp |
Source: Company, Angel Research
As for billing rates, Mphasis reported flat onsite pricing for all the business segments. Onsite applications rate stood at US $72/hour, while the onsite ITO rate was
US $67/hour. The offshore applications and ITO billing rates stood at US $19/hr each, coming off from US $20/hr in 4QFY2010. The BPO pricing remained flat qoq at
US $7/hr. Thus, pricing does not show much decline as feared. Management indicated that there have been selective pricing interventions with HP, but see pricing to be stable going ahead.
Segment-wise pricing
| Price movement ($/hr) | 1QFY11 | 4QFY10 | 1QFY10 | % chg qoq | % chg yoy |
| APO | |||||
| Onsite | 72 | 72 | 72 | 0.0 | 0.0 |
| Offshore | 19 | 20 | 23 | (5.0) | (17.4) |
| ITO | |||||
| Onsite | 67 | 67 | 70 | 0.0 | (4.3) |
| Offshore | 19 | 20 | 18 | (5.0) | 5.6 |
| BPO 
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