MphasiS BFL Q3 net profit increases 57 percent, revenue by 28 percent

Bangalore: The MphasiS BFL Group consolidated net profit increased to Rs 28.50 crores for the quarter ended 31 December 2003, against a net profit of Rs 18.18 crores in corresponding period the previous year, which is an increase of 57 percent.

The net profit for the current quarter also represents an increase of 12 percent over the Rs 25.46 crores posted in the previous sequential quarter ended 30 September 2003.

Consolidated revenues at Rs 148.63 crores in this quarter increased by 28 percent over the same period last year. On a sequential quarter on quarter basis revenues grew by 4 percent. Software services revenues in the current quarter at Rs 100.30 crores increased by 2.2 percent on a sequential quarter on quarter basis. Net margins in the software business remained steady at nearly 21 percent. There were 204 people added in the current quarter in the software services business.

The Group BPO subsidiary, MsourcE, recorded revenues of Rs 48.32 crores in the quarter ended 31 December 2003, against Rs 26.22 crores in the corresponding quarter of the previous year, representing a revenue growth of 84 percent. On a sequential quarter on quarter basis this represents a revenue growth of 8 percent. During this quarter MsourcE registered a net profit of Rs 7.55 crores. MsourcE currently has eighteen active clients and 3,418 staff.

Commenting on the results Mr Jerry Rao, chairman and CEO, said, "The group has had a very good quarter with profits at our BPO subsidiary showing remarkable growth. Client additions in the software business have been particularly encouraging and the expectations are that this trend will continue in the immediate future. At the same time, we have consciously invested and added development staff to meet the strong pipeline of business for the next quarter. We have also been successful in controlling our overhead costs across the group."

The significant improvement in net profit this quarter is due to lower selling, general and administrative costs and foreign exchange gains. Selling, general & administrative expenses have reduced from 17.7 percent as percentage of revenues in the same quarter last year to 14.1 percent of revenues in the current quarter.

During the quarter the group added ten new clients including one in BPO. These include four each in the financial & retail/logistics verticals and a large technology company. Software manpower utilisation rates were at 71 percent this quarter whilst BPO utilisation rates were maintained at 67 percent. Onsite billing rates increased marginally and the offshore rates were kept at last quarter levels. Total cash balances as at 31 December 2003 increased to Rs
133.3 crore.

Group consolidated revenues for the nine months ended 31 December 2003 went up by 37 percent at Rs 421.78 crore compared to the previous year, while net profits increased by 52 percent to Rs 73.45 crores in the same period.