Mphasis Q3 profit rises with slight margin dip

23 Jan 2025 , 11:40 PM

Mphasis, a leading software services company, reported modest growth in its third-quarter FY25 net profit. This growth was supported by steady revenue increases and strong performance in core business segments.

Net profit reported by the company stood at ₹427.8 crore, growing by 1% from ₹423.3 crore in the earlier quarter. Revenue gained 0.7% from ₹3,536.1 crore in Q2 FY25 to ₹3,561.3 crore. Also, EBIT went up 0.2% from ₹544.2 crore in the earlier quarter to ₹545.5 crore.

However, the operating margin dipped slightly. Operating margin declined marginally to 15.3% from 15.4% in Q2, despite revenue and profit growth. Mphasis felt that the reason for this slight fall was because of a slow recovery in client spend in its banking and financial services vertical, which contributes nearly half of the company’s revenue.

But during this quarter, the BFS segment witnessed almost 9% growth because of a pickup in client spend and a revival in the mortgage business. This revival is in line with the Federal Reserve’s decision to ease interest rates starting September, which has been steadily restoring confidence in the financial sector.

The company also witnessed a healthy 46% growth in TCV, with total contract value amounting to ₹2,900 crore in the quarter. Such good contract wins, in fact, point to healthy demand for services offered by Mphasis in its key markets.

Meanwhile, TMT segment was also phenomenal where revenue increased by almost 13% for the quarter driven by continued order wins and high client demand in those verticals.