Company update - Mphasis Ltd - Q3FY21 - ICICI Direct

Mphasis reported a healthy set of Q3FY21 numbers. Revenues in dollar terms increased 2% QoQ mainly led by 5.6% QoQ growth in direct channel partially offset by 17.5% QoQ decline in DXC channel. The company's EBIT margin increased by 30 bps QoQ to 16.4%. In addition, the company has guided at margins of 15.5-16.5% for FY21E.

Valuation & Outlook

The company over the past few quarters has seen healthy deal win traction. This coupled with less exposure to impacted verticals, capability to mine clients effectively, market share gains via vendor consolidation, low legacy exposure, traction in Blackstone portfolio and healthy margins prompt us to be positive on the stock. Hence, we maintain our BUY rating on the stock with a target price of Rs. 1830 (20x PE on FY23E EPS) (earlier target price was Rs. 1600).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Mphasis_CoUpdate_Jan21.pdf

Shares of MPHASIS LTD. was last trading in BSE at Rs.1600.7 as compared to the previous close of Rs. 1599.8. The total number of shares traded during the day was 36651 in over 3406 trades.

The stock hit an intraday high of Rs. 1616.65 and intraday low of 1523.9. The net turnover during the day was Rs. 57636175.

Source : Equity Bulls

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