MphasiS BFL: A Niche Artist This
Dataquest, Feb 28, 2002.
Despite being confined to specific areas of operation, MphasiS has shown strong returns

Fact Sheet

139/1, Aditya Complex, 
Hosur Road Koramangala, 
Bangalore 560095
Fax: +91-80-552-2719
Area of specialization: Application management, legacy systems transformation, enterprise application integration and high-end architecture and IT consulting 
Revenues (March 2001): 172.87 crore
Consolidated Revenues: (March 2001): Rs 272.24 crore
Offices: India, US, UK, Netherlands, Germany, France, Japan, Hong Kong, Singapore and Australia
Listing (stock exchanges): Mumbai, Kolkata, Ahmedabad, Bangalore, Jaipur, and NSE
Face Value: Rs 10 per share
Current Market Price: Rs 435 per share
52 Week High/Low: 469/70
BSE Code: 526299

MphasiS BFL (MphasiS) provides software services and solutions in the area of application management, legacy systems transformation, enterprise application integration and high-end architecture and IT consulting with focus on financial Services, which includes Banking and Insurance, Retail, Logistics and Transportation, Technology and IT Enabled Services. It also provides IT enabled services, which includes call centers and business process outsourcing BPO . 

Formed as BFL, the company acquired California based MphasiS in the year 2000. The performance has now started to stabilize and improve despite the overall slowdown in the global IT market.

MphasiS BFL declared impressive performance in the third quarter ended December 2001. On a consolidated basis, including the performance of its subsidiaries, the company revenues were flat at Rs. 80.36 crore whereas net profit jumped 113% to Rs. 12.91 crore. Compared to the immediate previous quarter, while revenues were 53% up the net profit was 113% higher.

MphasiS BFL provides IT enabled services through MphasiS BPO India. MphasiS BPO India is 73% held by the 100% subsidiary of MphasiS-BFL - MphasiS BPO Corporation US with Barings Private Equity holding 22% stake and the balance held by other private investors. MphasiS BPO currently has operations in Bangalore and Pune providing services to 8 international clients. The subsidiary’s contribution to the consolidated revenues in the third quarter was 7%. MphasiS is bullish on the IT enabled and Business Process Outsourcing services. MphasiS issued guidance for the fiscal 2003 at 25-30% jump in revenues and 60-70% growth in the net profit. It expects revenues of MphasiS BPO to grow by 200%.

MphasiS BPO had 492 executives with revenues of Rs. 5.81 crore. MphasiS BFL expects MphasiS BPO to grow by 200% in the fiscal 2003 and drive the company’s future growth. Notably, MphasiS BPO is yet to break-even and the management expects the MphasiS BPO to report profits in the first quarter of next fiscal. 

MphasiS BFL is currently traded at Rs. 435 discounting the projected March 2002 EPS by 18 times and March 2003 EPS by 12 times. The share price of the company spurted by 28% to the current level after the announcement of the results.


(All figures in Rs Crore)

  2000# 2001 2002* 2003*
Sales 120.7 272.2 312.3 389.3
Other Income 12.7 2.7 7.7 8
Operating Profit 9.7 17.3 39.1 67.5
OPM (%) 8 6.4 12.5 7.3
Net Profit 0.4 11.9 39.5 61.5
Equity 9.4 15.9 17.2 17.2
EPS (Rs.) 0.5 7.5 23 35.9
Year ended March 31

Note: Financials for the year ended 2000 are on a standalone basis whereas the rest are on a consolidated basis

Investment at current levels could provide modest returns whereas the stock can be accumulated for gains in the long tem.