On Jan 23, Indian software services company Mphasis reported a third-quarter profit that exceeded expectations due to robust deal wins in its banking division. The company's net profit surged by nearly 15% to 4.28 billion rupees ($49.54 million) for the quarter ending on Dec. 31, slightly beating analysts' projections of 4.26 billion rupees, as per data from LSEG.
Mphasis' quarterly revenue stood at 35.61 billion rupees, a 7% increase from the previous year, although it fell short of analysts' expectations of 35.70 billion rupees. The U.S. client spending in the banking and financial services (BFS) segment has been gradually picking up since the Federal Reserve initiated its rate cuts in September.
The BFS segment, contributing almost half of Mphasis' total revenue, experienced an impressive 9% growth in revenue during the quarter, driven by heightened customer expenditure and a gradual recovery in the mortgage sector, as stated by the company.
Furthermore, the company's total contract value (TCV) increased by a significant 46% to $351 million during the quarter. The IT services sector in India, valued at $254 billion, has been witnessing a positive trend in the post-third quarter results, primarily due to signs of recovery in domestic spending, following a period of slow growth attributed to inflation and geopolitical uncertainties.
Indian IT firms, which heavily rely on the U.S. market for revenue, have been monitoring President Donald Trump's potential second term, buoyed by his proposed tax reductions and regulatory reforms. In addition, Mphasis saw substantial revenue growth of nearly 13% in its technology, media, and telecom (TMT) segment during the quarter, driven by an ongoing influx of new orders.
Prior to the results announcement, Mphasis' shares ended the day close to 4% higher. (1 USD = 86.3890 INR)