Anand Rathi has given Buy recommendation for Mphasis with a target price of Rs. 4150 in its research report issued on May 02, 2022
Anand Rathi’s research report on Mphasis
Mphasis had another strong quarter, growing 4% q/q (4.3% CC) to $431m. TCVs were a high $347m, up 42% y/y (TTM up 29% y/y). Commentary on US/mortgage was a little cautious but retained a high FY23 growth outlook (supported by hiring and TCVs) despite the situation. Q4 EBIT margin was 14.3% (flattish q/q) and FY23 guidance is 15.3% to 17%, with all four levers (M&A, utilisation, offshoring and pyramid) offering tailwinds ahead.
We raise our estimates ~10%, largely on margins, and our target to Rs4,150 (36x FY24, slightly above LTI on better FCF profile). We retain a Buy.