MphasiS Q2 net falls 12%; Hewlett Packard still a drag

BANGALORE: Hewlett Packard-owned MphasiS Ltd's second quarter net profits fell by 12% to Rs 189 crore, giving conclusive proof that the weakness in the work it gets from HP continues.

The company had posted a net profit of Rs 217.3 crore in the corresponding period last year. In the three months up to April, Mphasis's HP revenues fell by 2.8% on account of ramp down in certain projects.

Consolidated revenues during the period touched Rs1,329 crore, a 5.7% growth from a year ago, and 2% fall from the preceding three months.

Its mid-cap peers like MindTree and Hexaware have reported robust revenue growth during the same period. Analysts had expected a 1-2% revenue growth for MphasiS during the quarter.

Once considered a strong player in the tier 2 group of Indian IT exporter's, Mphasis has been delivering weaker-than-expected results over past few quarters, dragged mostly by its largest client and parent - HP, which is believed to be driving down prices constantly as it seeks to rationalize its cost structure. HP contributes about 58% of MphasiS' revenues.

Even as its HP business continued to decline, MphasiS saw its non-HP business also decline 3.2% sequentially to Rs 563 crore.

The banking and capital market segment shrunk by 3 % at Rs 344 crore.