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Mphasis eyes more business from new clients

DXC Technology, a company spun off from Mphasis' erstwhile parent HP, contributed 24.1% of the mid-tier IT services provider’s revenue in the September quarter.

, ET Bureau|
Updated: Nov 19, 2019, 12.47 PM IST
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Currently, the firm has 104 clients in the $1 million revenue category, the maximum number, while eight clients contribute more than $20 million in revenue.

Mumbai: Mphasis will see growth moderate from DXC Technology as it eyes more business from new clients and from firms that are part of the portfolio of Blackstone, its largest investor. DXC Technology, a company spun off from Mphasis' erstwhile parent HP, contributed 24.1% of the mid-tier IT services provider’s revenue in the September quarter.

“We may see a moderation in the growth momentum that we see from this channel, and that is partly by design and strategic choice we made from the point of view of having the business mix and metrics that we want to drive forward,” Mphasis CEO Nitin Rakesh told ET. Earlier this month, DXC said it planned to spin off three of its businesses to focus on core services. In June, DXC acquired Luxoft, a Swiss engineering services firm that has a presence in India. “The changes are across multiple levels, we are closely engaged and so far, we think it is status quo. That doesn’t mean things can’t change over a couple of quarters, but we have not seen any major shifts so far,” he said.

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On Friday, Mphasis reported quarterly profit of Rs 273.3 crore, up marginally from Rs 270.9 crore in the second quarter of last year. Revenue grew 12% to Rs 2,193 crore, against Rs 1,962 crore. “The fastest-growing business continues to be the digital business. Our new client growth is 80% year-onyear and Blackstone account growth is 50% year-on-year, so clearly we are creating new clients in the segments of $5-$10-$25 million and even $100 million, and at the right time, we will start breaking out some of those metrics across segments,” Rakesh said.

Currently, the firm has 104 clients in the $1 million revenue category, the maximum number, while eight clients contribute more than $20 million in revenue. The company won new deals — a majority of which were digital — worth $174 million in the quarter. Mphasis will also undertake pyramid correction amongst other measures to cut costs and adjust margins in the coming quarters, he said.
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