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Below is quote on Mphasis Q1FY22 results by Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd   

Mphasis reported a 6.1% qoq growth in revenues to USD 363mn which was ahead of expectations. In rupee terms revenue grew by 6.6% qoq to ₹2,690.8 crore while gross profits declined by 2.6% qoq to Rs. 716.6 crore due to increase in manpower costs. Operating profit for the quarter was up by 5.3% qoq due to tight control in SG&A expenses. Net profit was up by 7.2% QoQ to ₹339.7 crore. Overall the Q1FY22 numbers were above street estimates led by solid beat on topline growth as a 9.8% qoq constant currency growth in the direct business more than offset a 18.1% qoq decline in DXC business. The company reported record direct TCV wins at USD 505mn for the quarter of which 85% came from new gen technologies. Post the Q1FY22 results concerns over degrowth in the DXC business have been addressed as the direct channel has more than offset loss from the DXC channel over the past few quarters. Moreover the contribution from the DXC business has now come down to ~9% of overall revenues as compared to over 25% of revenues a few years back. We continue to maintain our positive stance on Mphasis post the Q1FY22 results.

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