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From the News Desk
Thursday, 31. August 2006
MphasiS Q1 Net Falls 55 pct on Rising Wages
Software and back office services company MphasiS BFL Ltd. has a reported lower first-quarter consolidated net profit of 151.6 million rupees from 337 million a year ago, while revenue rose 18.6 percent to 2.6 billion.
The company said the fall in net profit was mainly due to the rising wages and slow growth in outsourcing. But the company was positive about its outlook and said it expected a proposed merger with EDS, which holds 51.4 percent of the company.
"This has been a challenging quarter for us with cost increases from salary hikes eroding our margins," Chief Executive Officer Jerry Rao said in a statement.
"This was aggravated by slowdowns at the front-end due to the long process around the open offer (by EDS)."
In April, MphasiS board had approved a million bid by EDS for a majority stake in the Bangalore-based IT services firm. EDS will raise its stake in MphasiS to 61.8 percent after a merger of its wholly owned subsidiary, EDS India, with the Indian company.
The company added 12 clients during the quarter, 10 in its software operations and two in its back-office services business.
The company said the fall in net profit was mainly due to the rising wages and slow growth in outsourcing. But the company was positive about its outlook and said it expected a proposed merger with EDS, which holds 51.4 percent of the company.
"This has been a challenging quarter for us with cost increases from salary hikes eroding our margins," Chief Executive Officer Jerry Rao said in a statement.
"This was aggravated by slowdowns at the front-end due to the long process around the open offer (by EDS)."
In April, MphasiS board had approved a million bid by EDS for a majority stake in the Bangalore-based IT services firm. EDS will raise its stake in MphasiS to 61.8 percent after a merger of its wholly owned subsidiary, EDS India, with the Indian company.
The company added 12 clients during the quarter, 10 in its software operations and two in its back-office services business.
