MphasiS BFL - The Compass, Business Standard ,19 April 2001

MphasiS BFL (formerly BFL Software) has completed FY01 on a rather handsome note, posting an impressive 21.5 per cent rise in sales and a 70 per cent jump in earnings in its fourth quarter (Q4) compared to the previous quarter ended December 2000. Further, the company's improvement in operating margins is impressive - from under 20 per cent in third quarter (Q3) to almost 26 per cent this quarter. Significantly, software development expenses went down from 67 per cent of sales in Q3 to just 60 per cent in Q4.

Come to think of it, MphasiS' good show has come at a time when many second-rung Indian software companies have faltered; BFL Software had faltered in the previous year, when most other companies had done exceedingly well.

Note that the above-mentioned figures consist of only the financials of the erstwhile BFL Software - the performance of MphasiS is still not reflected in the results. In fact, MphasiS has been doing well recently, considering that the consolidated results of the company reflect a much better picture. Consolidated revenues for the year grew at an impressive 82 per cent, which is close to two-times BFL Software's annual growth rate.

The company's call centre operations has done well to grow at around 90 per cent to a $ 1.12 million business. Employees engaged in call centre operations, under MphasiS BPO - MphasiS' call centre subsidiary, saw a five-fold jump this year.

However, the consolidated figures show a sequential growth of only 5 per cent in revenues, against the 21.5 per cent growth shown by BFL. Yet, better capacity utilisation (up from a yearly average of 55 per cent last year to 66 per cent this year) has meant that EBITDA margins have improved considerably. The company also boasts of significant additions to its list of clients, from 45 to 64.

The markets too have taken a liking to the results - after having hit its yearly low of Rs 160 just prior to the results, the scrip has recovered smartly by around 25 per cent and now trades around Rs 200. Emcee (With contribution by Satyan Nair and Mobis Philipose)