Mid-tier IT firm Mphasis is seeing a high inflow of deals valued between $1-10 million, Nitin Rakesh, CEO of the company told FE. “We have seen $1-10 million deal activity burst. And even this (September) quarter, the pickup in small deal volume, which typically is 0-1 year consumption, is really what’s driving the overall TCV (total contract value) number,” he said.
The company’s revenue contribution from $1 million clients rose by five to 140 in the September and those of $5 million increased by three to 51.
However, the company’s new total contract value (TCV) wins in the September quarter fell to $207 million against $319 million recorded in the June quarter. Of the new TCVs, 88% of it was from new-generation services and one deal was just under $100 million.
“There is a chunk of the pipeline in large deals that is also transformation-led deals, where I think the decision-making is still a little bit elongated because there is a certain degree of scrutiny still going on larger programmes,” Rakesh said.
Further, Mphasis said a third of its pipeline is now AI influenced. Last quarter the company had said it is seeing large deal activity in the GenAI and AI space, with the transformation projects potentially spanning two to three years.
Rakesh was speaking post the company’s July-September quarter earnings. The company’s revenue from operations rose 3% quarter-on-quarter to Rs 3,536.15 crore.
Further, the operating margin or earnings before interest and tax (Ebit) margin rose 40 bps to 15.4% and the net profit increased 6% quarter-on-quarter to Rs 544.2 crore.
“Despite many ongoing challenges, the macro environment continues to trend in the right direction. Savings led transformation thesis is core to all our deal archetypes and solutions, thus significantly enhancing service delivery and savings for clients,” Rakesh said.
On the verticals front, the Banking and Financial Services sector saw a 3.6% sequential growth, reaching Rs 1,689 crore. Meanwhile, the Technology, Media, and Telecom segment experienced a 6% growth, totalling Rs 582 crore.
“There is definitely some spend opening up in BFSI, especially for critical programs. I think instead of working on an annual budget basis, a lot of banking customers have been working on a project funding basis,” Rakesh said.
The company’s headcount decreased by 44 employees, bringing the total to 31,601 for the July-September period. Further, the onsite utilisation rate increased by one percentage point, reaching 87%.
Furthermore, the company also announced that its board has approved further investments of up to $30 million in the equity share capital of Mphasis Europe BV, a wholly owned subsidiary. It added that the primary objective of this investment is to enable Mphasis Europe BV inter alia in repayment of borrowings and the investment will be made by end of March 2025.
From: financialexpress
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