MphasiS profit down 11% to Rs 194.8 crore on wage hikes, tax

BANGALORE: Wage hikes and steeper tax rates dragged down profits of Hewlett-Packard-owned MphasiS by 11% sequentially to Rs 194.8 crore for the third quarter ended July 31. In the previous quarter, the company’s net profit was at Rs 219.29 crore. Compared to the year-ago period, profits fell 28 %. The expiry of tax holidays under Software Technology Parks of India scheme in March this year, pushed up effective tax rate for the company to 24 % as compared to 18 % last year. Consolidated revenues of the company which follows a November-October financial year, grew 2.9% sequentially to Rs 1,294 crore compared to Rs 1,257 crore in the previous quarter. Revenues grew a mere 1.1 % compared to the corresponding quarter last year.

Operating profit declined 24% to Rs 208 crore compared to Rs 276 crore reported for the same period a year ago. “Uncertainty in the external market requires a company that is adaptive. That is exactly what we did in 2009,” said Ganesh Ayyar, chief executive officer, MphasiS. Hewlett-Packard is anticipating a tough year ahead and has cut a billion dollars from its sales forecast for the year. Recently, the parent company announced that it will buy UK-based software firm Automony for $10 billion. Hewlett-Packard decided to hive off its PC business and exited smart phone and tablet business. The company added 27 clients in the quarter out of which 18 of them didn’t come from HP.