Mphasis BFL: A Niche Artist This

Mphasis BFL (Mphasis) provides software services and solutions in the area of application management, legacy systems transformation, enterprise application integration and high-end architecture and IT consulting with focus on financial Services, which includes Banking and Insurance, Retail, Logistics and Transportation, Technology and IT Enabled Services. It also provides IT enabled services, which includes call centers and business process outsourcing

(BPO). 

Formed as BFL, the company acquired California based Mphasis in the year 2000. The performance has now started to stabilize and improve despite the overall slowdown in the global IT market.

Mphasis BFL declared impressive performance in the third quarter ended December 2001. On a consolidated basis, including the performance of its subsidiaries, the company revenues were flat at Rs. 80.36 crore whereas net profit jumped 113% to Rs. 12.91 crore. Compared to the immediate previous quarter, while revenues were 53% up the net profit was 113% higher.

Mphasis BFL provides IT enabled services through MsourceE India. MsourceE India is 73% held by the 100% subsidiary of Mphasis-BFL - MsourceE Corporation US with Barings Private Equity holding 22% stake and the balance held by other private investors. MsourceE currently has operations in Bangalore and Pune providing services to 8 international clients. The subsidiary’s contribution to the consolidated revenues in the third quarter was 7%. Mphasis is bullish on the IT enabled and Business Process Outsourcing services. Mphasis issued guidance for the fiscal 2003 at 25-30% jump in revenues and 60-70% growth in the net profit. It expects revenues of MsourceE to grow by 200%.

MsourceE had 492 executives with revenues of Rs. 5.81 crore. Mphasis BFL expects MsourceE to grow by 200% in the fiscal 2003 and drive the company’s future growth. Notably, MsourceE is yet to break-even and the management expects the MsourceE to report profits in the first quarter of next fiscal. 

Mphasis BFL is currently traded at Rs. 435 discounting the projected March 2002 EPS by 18 times and March 2003 EPS by 12 times. The share price of the company spurted by 28% to the current level after the announcement of the results.

Investment at current levels could provide modest returns whereas the stock can be accumulated for gains in the long tem. 

Sushanto Mitra  is the founder of

Technology Capital Partners



The views reflected here are of the author and not of this publication. No liability is accepted for losses based on the information presented here