| (Rs crore) | Q1 FY05 | Q4 FY04 | % change |
| Net sales | 1517.38 | 1349.45 | 12.44 |
| Other income | 15.71 | 1.02 | - |
| Operating profit | 489.27 | 449.17 | 8.93 |
| OPM (%) | 32.24 | 33.29 | -1.04 |
| Net profit | 388.34 | 335.23 | 15.84 |
| NPM (%) | 25.59 | 24.84 | 0.75 |
| EPS (Rs) | 46.84 |
| Trailing 12-month P/E | 28.97 |
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| Analysts feel that the company had revised its guidance quite a few times before, but the quantum of increase this time has come as a surprise. |
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| According to them, the latest guidance implies that the improvement in performance would continue through the fiscal. However, on the downside, the effect of the radical revision in earning estimates failed to reflect on the stock price. |
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| As a result, despite the revised EPS estimate of Rs 62.7 being higher than not only consensus forecast (less than Rs 60), but the most bullish estimates, it has surprisingly not resulted in an improvement in valuation for Infy. The stock trades at Rs 1,478 at a P/E of 28.97x. |
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MPHASIS BFL
Forex pacts, tax write-backs boost profit |
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| MphasiS BFL recorded strong revenue and net profit growth for the June quarter, boosted by gains on foreign exchange contracts, tax write-backs and the contribution of its BPO outfit, Kshema Technologies. |
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The company's revenues grew 11 per cent sequentially to Rs 175.78 crore while its net profit witnessed a sequential growth of 40.39 per cent to Rs 35.28 crore. Operating margin fell over 220 basis points sequentially to 13.2 per cent in the quarter. This is due to a sharp increase in SG&A expenses.
| MphasiS | | (Rs crore) | Q1 FY05 | Q4 FY04 | % change | | Net sales | 175.78 | 158.8 | 10.69 | | Other income | 0.02 | 0.06 | -66.67 | | Operating profit | 23.30 | 24.60 | -5.28 | | OPM (%) | 13.26 | 15.49 | -2.24 | | Net profit | 35.28 | 25.13 | 40.39 | | NPM (%) | 20.07 | 25.13 | -5.06 | | EPS (Rs) | 13.12 | | Trailing 12-month P/E | 23.96 |
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| The increase has been mainly in IT services, owing to certain one-time expenses incurred on account of write-off of pre-acquisition costs, expenses incurred when the authorised share capital increased and new office capitalisation expenses. |
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- IT services revenues grew 8.3 per cent while BPO services sales grew 15 per cent during the quarter on a sequential basis.
- SG&A expenses rose by a huge 52.1 per cent sequentially to Rs 18.46 crore. As a percentage of total revenues, SG&A expenses increased to 10.5 per cent for the quarter compared to 7.6 per cent in the preceding quarter.
- As a percentage of total revenues, selling expenses increased to 7.1 per cent for the quarter from 6.2 per cent for the preceding quarter.
- Foreign exchange during the quarter increased manifold to Rs 7.54 crore against Rs 1.41 crore during the quarter ended March 31, 2004.
- Interest income witnessed a marginal decline on account of a payout of investible cash during the quarter for the acquisition of Kshema.
- Provisions for income tax resulted in a credit of Rs 3.22 crore for the quarter compared to a tax charge of Rs 2.20 crore for the preceding quarter due to the deferred tax credit, primarily arising out of the restructuring of the US operations in IT services.
- The company added no manpower organically. However, there were 315 additions due to Kshema.
- Revenues from the BPO business grew 15 per cent sequentially and 71.8 per cent y-o-y to Rs. 64.64 crore. The company added 457 people in the segment in Q1 FY05.
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| Analysts feel that the company is looking to continue its topline growth in the ensuing quarters. |
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| They feel that the company is likely to comfortably meet its guidance of 35-40 per cent growth in revenues and 40-45 per cent growth in PAT for FY05 as there is revenue visibility from the Kshema buyout and MsourcE. |
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| However, they feel that a large part of the gains coming from extra ordinary items is a sore point. The stock is currently trading at Rs 270 at a P/E of 23.96x. Analysts peg an FY05 EPS of Rs 19. |
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MASTEK
Operating margin improves significantly |
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| Mastek reported a good performance for the June quarter. However, its full year performance left much to be desired. The company reported a 15.2 per cent sequential rise in its revenues while its PAT grew 24 per cent to Rs 12.42 crore. |
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More importantly, operating margins saw a huge 460 basis point improvement over the preceding quarter. The company
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