MphasiS BFL Q2 net at Rs 23cr

Bangalore : 30 October 2006: The MphasiS BFL Group consolidated net profit increased to Rs 23.4 crores for the quarter ended 30 September 2006, compared to a net profit of Rs 15.2 crores in the quarter ended 30 June 2006, representing an increase of 54%. The operating profit for the current quarter has almost doubled to Rs 32.8 crores when compared with the previous sequential quarter ended 30 June 2006.

Consolidated revenues at Rs 291.9 crores in the current quarter have increased by 28% over the same quarter last year. During the same period net profit declined by 42% from Rs 40.2 crores to Rs 23.4 crores. This included a forex loss of Rs 6.9 crores and a tax charge of Rs 3.9 crores in the quarter ended 30 September 2006 as against forex gain of Rs 4.0 crores and tax charge of Rs 0.9 crores in the quarter ended 30 September 2005. This also includes a provision for staff retention which will continue over the next five quarters.

Commenting on the results Mr. Jerry Rao, CEO and Chairman designate, said "We have crossed the Rs 500 crore mark in revenues in 6 months this year. We have added more than 1300 people this quarter to take our headcount past the 12,000 mark. While year on year revenue growth is back on track, we are still some ways from getting back to historical margin trajectories. If we continue with improvements, I am quite confident that this too will fall in place. Business from EDS has started flowing and the integration with EDS India is progressing well."

During the quarter the Group added eleven new clients, ten in software services and one in BPO. These include a global media conglomerate, a healthcare services firm, a management services company in the UK, a leader in optical sensing solutions and a electronic vending machine manufacturer in the software services business and a global banking giant in BPO.

This quarter the utilization rates in IT Services recorded an improvement to 74%; BPO utilization was flat at 56%. In the same period the Group recorded a headcount increase of 418 in software services and 883 in BPO to take the manpower numbers to 4,088 and 8,447 respectively for a Group total of 12,535 reflecting an increase of over 3,000 in the last twelve months.

On 19 October 2006, EDS has made a public announcement of its intention to make a voluntary open offer for approximately 32.95 million shares of MphasiS BFL Limited. The MphasiS board at its meeting today duly noted the same. The offer is slated to open on 27 November 2006 and close on 18 December 2006.

About MphasiS

MphasiS BFL Limited (Bombay Stock Exchange: 526299 and National Stock Exchange of India: MPHASISBFL), an EDS company, is a leading applications and business process outsourcing (BPO) services company based in Bangalore, India. It currently has over 12,000 employees, including 11,000 in India. MphasiS serves clients in multiple industries, including financial services, transportation, technology and healthcare, and is particularly strong in the retail banking sector serving the world's top five banks. To know more, please visit www.mphasis.com.