Morgan Stanley has maintained its equal-weight (EW) rating on Mphasis, with a target price of Rs 3,200. The company’s Q2 performance exceeded expectations in terms of revenue and margins, but deal wins were softer than usual.
Mphasis reported net revenue of Rs 35.4 billion, 1% ahead of estimates, with 2.4% QoQ constant-currency (cc) growth, compared to the expected 1.8%. Segment growth was driven by Banking, Financial Services (BFS) and Technology, Media, and Telecommunications (TMT), while the Logistics & Transportation vertical saw a decline.
The company posted an EBIT margin of 15.4%, higher than the estimated 15.1%, but new deal wins for the quarter, at US$207 million, were below the typical run rate of US$300 million, with 88% of the contribution coming from new generation services.
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