Mphasis ltd - Parag Research - Earns my two cents

Before you start reading this, please look into how IT companies can fail/cannot succeed

Top four threats

-  Dollar devalulation (how long these companies can they really hedge)
-  US Economy
-   Cloud computing & companies like salesforce.com
-   Competition from other countries and what happens if their currecy devalues


Obviously I am not up todate on what's going on Indian IT industry. Looks like Mphasis has good potential in the long run with strong parent like HP (PWC).  To really understand HP, one needs to understand the Big Four (used to by E&Y, Anderson/Accenture, KPMG, Deloitte). They are top tier consulting firms and strong market forces.

Good research by Parag. The more I read, the more I like them. I would hold my judgement on the buy and sell calls but definitely good research. Look at this report by Raunak. Great job

The story of Mphasis largely remains unchanged. Nevertheless, the company has reported a really good

quarter. Topline grew by 26% compared to Oct 08 and bottom line grew by 34% as compared to the same period. Since the previous year was just a seven month year, the annual numbers dont offer a sound basis of
comparison. Although the annual results have been appended. Ever since the acquisition by HP, there has been tremendous changes in the company in terms of aligning its cost structures. The operating margins when compared to last year's average show a difference of almost 10% , with current year's margin at 26%. This bout of profitability is also seen on account of new high value contracts which have come their way through generic sales growth as well as most of the contracts which have been gained due to the association with HP.

In terms of geographical segmentation 64% revenues is derived from the US, 20% from EU and APAC and
middle east contributes to 16% of revenues. The company added 771 employees this quarter, which is mainly on account of its acquisition of AIG's captive unit in October 09. The effect of the acquisition will only be apparent from Q1 of the forthcoming financial year. Total employee addition this year was 4,721 which takes the count to

Please read the rest of the report here

http://www.ppfas.com/pdf-docs/research/result-updates/mphasis-q4oct09-ppfas.pdf