MphasiS net increases by 20 p.c. for the year 05-06

BANGALORE: MphasiS BFL group has posted a net profit of Rs 149.85 crore for the year ended March 31, 2006, with a growth of 20.2 per cent compared to net profit of Rs 124.61 crore recorded during the same period last fiscal.

During the same time, the consolidated revenues have increased by 23 per cent, from Rs 765.67 crores last year to Rs 940.11 crores.

For the fourth quarter ended March 31, 2006, the company has registered net profits of Rs 35.15 crore with a growth of 13.53 per cent from Rs 30.96 posted during the corrwesponding quarter last year. For the quarter revenues were at Rs. 250.50 crores up 22 per cent over the levels of the same quarter last year.

The consistent profitability of the U.S. subsidiary along with the need to recognize the end of the tax holiday in India by 2009 under Indian GAAP and the newly introduced FBT have resulted in a tax charge this fiscal of Rs.5.84 crores as against a deferred tax credit last year, said company.

The Board of Directors have recommended a final dividend of Rs. 3.00 per share for the year 2005-06. This is on the expanded capital base after the 1:1 bonus issue made during the year.

Revenues in the Software Services business have increased from Rs 481.47 crores in 2004-05 to Rs 642.15 crores in 2005-06 with a growth of more than 33 per cent. Meanwhile the BPO business has not seen much growth where the revenue growth has been muted at 4.8 per cent to Rs 297.96 crores and decline of 18 per cent in Profit before tax (PBT).

Sequentially, revenue growth has been 3.3 per cent whereas net profits declined 13.9 per cent.

Commenting on the results Jerry Rao, Chairman and CEO, said " Our IT business has shown excellent growth and profitability and has turned around remarkably in the past one year. Our BPO business has remained steady despite several challenges that we faced in the beginning of the year. The existence of these two separate businesses which can offset each other's performance has been one reason we have fared better than many competitors our size."

The company added fourteen new clients including two in the BPO business during the quarter. Onsite billing rates in IT increased to $65 per hour while offshore rates dipped marginally to $20. BPO rates remained flat at $9. Total cash balances as at 31 March 2006 have improved to a shade under Rs 100 crores.

During the quarter the group added 591 employees including 477 in BPO for a total strength of 11,414 as at 31 March 2006 many of whom are on training. This represents an increase of 3,039 employees during the year including 2,247 in BPO. This has also led to a dip in offshore utilisation in software services to 68 per cent and in BPO to 53 per cent, including trainees. Onsite utilisation in software services have however improved to 89 per cent.

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