Add MphasiS, target price Rs 2285: ICICI Securities
Hence the brokerage expects modest growth of 8% in the direct channel in FY24E and then pick-up to 14%/13% in FY25E/FY26E.
By ETMarkets.com | Updated:
ETMarkets.com
ICICI Securities has add call on MphasiS with a target price of Rs 2285. The current market price of MphasiS is Rs 2145.4. MphasiS, incorporated in the year 1992, is a Mid Cap company (having a market cap of Rs 40435.82 Crore) operating in IT Software sector.
MphasiS key Products/Revenue Segments include Computer Software for the year ending 31-Mar-2022.
Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 3546.19 Crore, down -.48 % from last quarter Total Income of Rs 3563.23 Crore and up 12.42 % from last year same quarter Total Income of Rs 3154.36 Crore. Company has reported net profit after tax of Rs 412.27 Crore in latest quarter.
The company’s top management includes Mr.Davinder Singh Brar, Mr.Pankaj Sood, Mr.Kabir Mathur, Mr.Maureen Anne Erasmus, Mr.Marshall Jan Lux, Mr.Amit Dalmia, Mr.Amit Dixit, Mr.David Lawrence Johnson, Ms.Jan Kathleen Hier, Mr.Narayanan Kumar, Mr.Nitin Rakesh, Mr.Courtney Della Cava. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 19 Crore shares outstanding.
Investment Rationale
Mphasis’ strong capability in the BFSI vertical backed by strong deal wins in Q3FY23 (US$401mn, up 33% QoQ and 20% YoY) should help drive growth in the direct channel (94% of overall revenues in Q3FY23) in the near to medium term. Company has consistently gained market share in its key BFSI vertical while decent technology spend outlook by large banking customers forCY23E should bode well for Mphasis’ direct channel growth. Decline in the mortgage business (Digital Risk subsidiary) is still not completely behind as per the brokerage's view, though it is now just 8.8% of Q3FY23 revenues with more vulnerable components like origination and refinancing now 20% of DRand 2% of overall company revenue.
Hence the brokerage expects modest growth of 8% in thedirect channel in FY24E and then pick-up to 14%/13% in FY25E/FY26E.
Promoter/FII Holdings
Promoters held 55.65 per cent stake in the company as of 31-Dec-2022, while FIIs owned 18.89 per cent, DIIs 19.32 per cent.
MphasiS key Products/Revenue Segments include Computer Software for the year ending 31-Mar-2022.
Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 3546.19 Crore, down -.48 % from last quarter Total Income of Rs 3563.23 Crore and up 12.42 % from last year same quarter Total Income of Rs 3154.36 Crore. Company has reported net profit after tax of Rs 412.27 Crore in latest quarter.
The company’s top management includes Mr.Davinder Singh Brar, Mr.Pankaj Sood, Mr.Kabir Mathur, Mr.Maureen Anne Erasmus, Mr.Marshall Jan Lux, Mr.Amit Dalmia, Mr.Amit Dixit, Mr.David Lawrence Johnson, Ms.Jan Kathleen Hier, Mr.Narayanan Kumar, Mr.Nitin Rakesh, Mr.Courtney Della Cava. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 19 Crore shares outstanding.
Investment Rationale
Mphasis’ strong capability in the BFSI vertical backed by strong deal wins in Q3FY23 (US$401mn, up 33% QoQ and 20% YoY) should help drive growth in the direct channel (94% of overall revenues in Q3FY23) in the near to medium term. Company has consistently gained market share in its key BFSI vertical while decent technology spend outlook by large banking customers forCY23E should bode well for Mphasis’ direct channel growth. Decline in the mortgage business (Digital Risk subsidiary) is still not completely behind as per the brokerage's view, though it is now just 8.8% of Q3FY23 revenues with more vulnerable components like origination and refinancing now 20% of DRand 2% of overall company revenue.
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Hence the brokerage expects modest growth of 8% in thedirect channel in FY24E and then pick-up to 14%/13% in FY25E/FY26E.
Promoter/FII Holdings
Promoters held 55.65 per cent stake in the company as of 31-Dec-2022, while FIIs owned 18.89 per cent, DIIs 19.32 per cent.
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