Mphasis continues to slip after weak results

MUMBAI: Shares of Mphasis continued to drift lower after the company announced its quarterly results.

The company posted net profit of Rs 147.61 crore for quarter ended January 2012 as compared to Rs 209.11 crore in the same period a year ago. Total income increased to Rs 893.45 crore for quarter ended January 2012 from Rs 833.28 crore in the corresponding quarter previous year.

“Q1FY12 financials are below expectations with higher than expected decline from HP. As HP is not performing well in its Enterprise Solutions segment, we expect pressure on revenue growth in MphasiS as well with a risk of pricing cut in future.

The stock was at attractive valuations after the last quarter’s earnings and it has given 37% absolute returns. We downgrade the recommendation from BUY to ‘REDUCE’ with a target price of Rs 400 based on 10x PER multiple on 18-months forward earnings,” said Pinc report.