Acquisition, portfolio expansion to aid revenue growth for Mphasis

Near-term returns may be muted given the sharp run in stock price

The stock of India’s eighth largest software services company by market capitalisation, Mphasis, was up about 1.8 per cent in trade after it announced the acquisition of US-based firm, Blink Interactive. Mphasis acquired the company, which offers design consultancy services around User Experience (UX) user research based software product design strategy, for $94 million.

The acquisition offers twin benefits for Mphasis. It increases the total addressable market (TAM) in this segment to $24 billion by CY24 and growth rates in the upstream user research, strategy and design are at 25-30 per cent which is 4-5 times the overall IT services