15 May 2021
4QFY21 Results Update | Sector: Technology
Mphasis
Buy
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
Y/E Mar
2021 2022E
97.2
106.7
Sales
16.1
16.7
EBIT Margin
12.2
14.2
PAT
64.2
74.9
EPS (INR)
1.7
16.6
EPS Gr. (%)
349.3
379.7
BV/Sh. (INR)
Ratios
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div Yield (%)
19.7
16.8
101.2
28.0
5.2
17.5
3.6
20.8
17.7
60.8
24.0
4.7
15.2
2.5
CMP: INR1,789
TP: INR2,030 (+13%)
Direct business to drive performance
MPHL IN
193
334.7 / 4.6
1883 / 791
6/23/66
652
2023E
122.2
18.0
17.4
91.7
22.5
416.9
23.3
20.1
60.8
19.6
4.3
12.2
3.1
DXC to remain a drag, but diminish over time
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Mar-21 Dec-20 Mar-20
56.0
56.1
56.2
17.2
16.0
14.2
21.8
22.8
23.9
5.0
5.1
5.8
FII Includes depository receipts
MPHL’s 4QFY21 revenue growth was led by 3.5% CC QoQ growth in the
Direct business, while DXC vertical (12% of revenue, -7.7% QoQ CC) remains
a drag. EBIT margin dip of 30bp QoQ was due to higher sales investments. It
won USD245m of new deals in 4QFY21, and announced its largest ever
single deal of USD250m (BFSI, 10-year duration), which will count in 1QFY22
TCV.
MPHL’s Direct business continues to deliver standout growth (FY19-21 USD
CAGR of 19%) among stocks in our coverage universe. Given the acceleration
in deal wins – TCV rose 51% YoY to USD1.1b in FY21 – and management
commentary of industry-leading growth, we expect this to continue in FY22E
(+18.7% YoY). We see the large deal momentum at MPHL as a key positive,
as it should lead to better medium-term growth visibility in the business.
This growth, despite the expected moderation in its mortgage business (DR),
implies performance in line with midcap IT Services peers like LTI, COFORGE
and MTCL, which are trading at a 20-30% premium valuation to MPHL.
We expect DXC business to run significantly below the remaining
commitment over the next few months in our base case, and view any
fallback provision or near term pick up as an upside. Our analysis suggests
that MPHL’s DXC business would decline by 30% CAGR over FY21-23E, and
settle at mid-single digit contribution by FY23E.
Reduced exposure to DXC should help lower growth concerns in the overall
business and help its comparable Direct business (FY21-23E CAGR of 17%) to
gain strength. This should lower the valuation discount v/s peers, despite
comparable growth in the Direct business.
We expect margin to improve in FY22 (+60bp YoY) and see MPHL performing
near the upper end of its guidance of 15.5-17%, helped by operating
leverage and lower exposure to DXC. This should help it deliver PAT growth
of ~20% over FY21-23E.
We have kept our estimates unchanged. Despite the DXC overhang, with
strong Digital capabilities and client relationships, MPHL is well-positioned to
be a key beneficiary in the current context. Our TP implies 22x FY23E EPS.
Maintain Buy.
Topline above our estimates led by lower-than-expected DXC decline
USD revenue grew 7% YoY to USD342m (est. USD 339m), EBIT grew 6% to
INR4,054m (est. 5% growth), and PAT declined 10% to INR3,169m (in line) in
4QFY21. Revenue (USD)/EBIT/PAT grew 6%/10%/3% YoY in FY21.
Revenue grew 2.5% QoQ to USD342m, above our estimate. In CC terms,
revenue growth stood at 2% QoQ and 4.9% YoY.
EBIT margin fell 30bp QoQ to 16.1%, in line with our estimate of 16.2%.
PAT declined 2.6% QoQ to INR3,169m, in line with our estimate.
Mukul Garg – Research analyst
(Mukul.Garg@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Research analyst : Anmol Garg
(Anmol.Garg@ MotilalOswal.com) /
Heenal Gada
(Heenal.Gada@MotilalOswal.com)
 Motilal Oswal Financial Services
Mphasis
The stellar growth seen in Direct (+3.5% QoQ CC; +19.9% YoY CC) is encouraging.
The strong momentum was partially offset by a 7.7% sequential decline (down
46.2% YoY) in the DXC business. DXC now contributes only 12% to overall
revenue (v/s 23% a year ago).
Vertical-wise, Banking declined (-3.6% QoQ); Insurance continued its growth
momentum at 6.4% QoQ; IT, Communications and Entertainment grew 15.9%
QoQ; Logistics and Transportation was up 8.7% QoQ; and other emerging
technologies grew 5.8% QoQ.
Among services, growth was driven by Application (9.3% QoQ), while BPO (-
8.3%) and Infrastructure services (-1.9% QoQ) declined.
Among geographies, EMEA/India/RoW reported a sequential growth of
14.9%/9.5%/18.4%, while America came in largely flat.
MPHL won USD245m worth of deal wins in the Direct channel, of which 69%
was in new-gen services. This does not include renewals. This takes FY21 TCV to
USD1.1b (+51% YoY).
It announced a landmark deal win of USD250m in 1QFY22, the highest ever
single deal for the company.
OCF grew 10% YoY and OCF/EBITDA stood at 81% for FY21. FCF grew 11% and
FCF/PAT stood at 109%.
Key highlights from the management commentary
The management guided at industry-leading growth in FY22 in its Direct
business. In the case of DXC, revenue will continue to decline and growth should
settle in the mid-single digit range in the medium term.
MPHL announced a landmark deal of USD250m won in 1QFY22. The initial
agreement is for 10 years and ramp up would start in FY22. This deal sourced
out of a UK based client is in the BFSI space. While the initial commitment is for
10 years, it can increase going forward. The deal involves transformation-related
work in the middle and back office of the client.
The management guided at margin to be in the 15.5-17% band. This is on the
back of its intention to reinvest in the business. It is confident of managing
investments despite rising cost pressures due to margin levers.
Valuation and view
Impressive deal wins over the last three quarters and a healthy deal pipeline
would likely drive growth in the near term. While the DXC business (~12% of
revenue) related overhang persists, strong traction in Direct International
should continue to drive overall performance. The management’s guidance on
its ability to defend margin is a key positive.
The ability to win multiple large Digital transformation deals proactively and
under vendor consolidation scenarios indicates strength in its sales and delivery
capabilities.
Higher exposure to largely stable verticals (BFSI – ~60% of revenue) should help
mitigate risks to some extent.
The stock is currently trading ~19.5x FY23E EPS. We value the stock ~22x FY23E
EPS.
Maintain Buy.
15 May 2021
2
 Motilal Oswal Financial Services
Mphasis
Quarterly Performance
Y/E March
Revenue (USD m)
QoQ (%)
Revenue (INR m)
YoY (%)
GPM (%)
SGA (%)
EBITDA
EBITDA Margin (%)
EBIT
EBIT Margin (%)
Other income
ETR (%)
PAT
QoQ (%)
YoY (%)
EPS (INR)
E: MOFSL Estimates
1Q
297
1.8
20,626
13.2
30.2
12.0
3,747
18.2
3,197
15.5
342
25.1
2,651
-0.4
2.6
14.1
(INR M)
Var. (% /
bp)
1.0
97bp
2.1
232bp
71bp
81bp
1.0
-10bp
1.0
-9bp
-16.9
19bp
-0.2
-0.4
FY20
2Q
3Q
305
318
2.6
4.4
21,581 22,767
10.8
13.7
30.4
30.4
11.6
11.6
4,057
4,286
18.8
18.8
3,475
3,711
16.1
16.3
134
172
24.1
23.9
2,738
2,954
3.3
7.9
1.1
6.3
14.6
15.7
4Q
320
0.6
23,462
14.6
31.3
12.4
4,434
18.9
3,824
16.3
319
14.9
3,525
19.3
32.4
18.8
1Q
305
-4.5
22,882
10.9
28.9
10.7
4,178
18.3
3,583
15.7
182
27.0
2,750
-22.0
3.7
14.6
FY21
2Q
3Q
327
334
7.2
2.0
24,354 24,743
12.8
8.7
30.3
31.0
11.7
12.2
4,524
4,654
18.6
18.8
3,924
4,048
16.1
16.4
114
218
25.9
23.7
2,992
3,255
8.8
8.8
9.3
10.2
15.9
17.2
4Q
342
2.5
25,243
7.6
31.0
12.5
4,671
18.5
4,054
16.1
182
25.2
3,169
-2.6
-10.1
16.7
FY20
1,240
10.8
88,239
12.8
30.6
11.9
16,524
18.7
14,207
16.1
967
21.8
11,868
10.6
63.1
FY21
1,309
5.6
97,222
10.2
30.3
11.8
18,027
18.5
15,609
16.1
696
25.4
12,166
2.5
64.2
Est.
4QFY21
339
1.5
24,713
5.3
30.3
11.7
4,623
18.6
4,014
16.2
219
25.0
3,175
-2.5
-9.9
16.8
Key performance indicators
Y/E March
1Q
Margins
Gross Margin
EBIT Margin
Net Margin
Operating metrics
Headcount
Deal Win TCV (USD m)
Key Verticals (YoY %)
BFS
Insurance
IT, Comm., Ent.
Key Geographies (YoY %)
North America
Europe
30.2
15.5
12.9
25,499
151
5.0
14.5
6.2
10.1
3.0
FY20
2Q
30.4
16.1
12.7
26,963
174
10.1
10.2
4.7
9.3
3.8
3Q
30.4
16.2
12.9
27,289
189
16.2
7.0
5.1
11.4
15.4
4Q
31.3
16.3
15.0
26,398
201
12.9
4.5
-4.4
7.8
18.2
1Q
28.9
15.7
12.0
26,143
259
12.3
-12.3
-12.2
0.3
14.9
FY21
2Q
30.3
16.1
12.3
27,148
360
25.3
-9.0
-21.3
5.9
14.7
3Q
31.0
16.4
13.2
28,116
247
23.0
-9.5
-14.1
5.4
8.8
4Q
31.0
16.1
12.6
29,473
245
17.5
-5.6
3.4
5.6
16.2
30.6
16.1
13.4
26,398
715
11.0
8.8
2.8
9.6
10.4
30.3
16.1
12.5
29,473
1111
19.6
-9.1
-11.1
4.3
13.6
FY20
FY21
15 May 2021
3
 Motilal Oswal Financial Services
Mphasis
Key highlights from the management commentary
Demand and industry outlook
In FY21, MPHL delivered 5% revenue growth, which was above industry growth.
It delivered industry-leading growth in its Direct business, with Europe growing
at 25% in FY21.
Within BFS, the company continues to enjoy market share gains. The Insurance
segment has a robust deal pipeline. Hi-Tech grew over 50% in FY21 and the
management expects this traction to continue.
TCV for 4QFY21 stood at USD245m, the fifth consecutive quarter of TCV being
above USD200m. There has been an increasing component of large deals and
heavy contribution from new-gen areas, with deal durations increasing to 1-1.5
years.
MPHL announced a landmark deal of USD250m won in 1QFY22. The initial
agreement is for 10 years and ramp up would start in FY22. This deal sourced
out of a UK based client is in the BFSI space. While the initial commitment is for
10 years, it can increase going forward. The deal involves transformation-related
work in the middle and back office of the client.
Deal pipeline is at its peak, despite conversion of a USD250m deal in 4QFY21.
The management said conversions for the company have been increasing.
Cloud wins increased 49% YoY and 40% of the pipeline is Cloud-based. The
company has the strongest pipeline across verticals dominated by Cloud and
next gen services.
The company intends to expand its sales and delivery functions outside the UK
and Canada, while building near shore delivery centers as well.
The management guided at industry-leading growth in FY22 in its Direct
business. In the case of DXC, revenue will continue to decline and growth should
settle in the mid-single digit range in the medium term.
Digital Risk had multiple advantages in FY21, which are not expected in FY22.
However, the management is confident that it will remain in the same range.
Margin pressure in 4QFY21 was due to ramp up of some large deals, along with
investments in S&M.
The management guided at margin to be in the 15.5-17% band. This is on the
back of its intention to reinvest in the business.
It has
given a large buffer to its delivery team, given the situation in India.
The management is confident of managing investments despite rising cost
pressures due to margin levers.
The company hired a record 1,300 employees during 4QFY21, which indicates
enough demand visibility.
The management has identified a three point strategy to boost growth: 1]
continuous augmentation of capabilities to nurture its GTM strategy, 2)
geographical expansion in sales and delivery, and 3) expanding its leadership
pool.
Margin performance
Other highlights
15 May 2021
4
 Motilal Oswal Financial Services
Mphasis
Exhibit 1: Application services reported strong growth in 4QFY21, while the rest reported a
sequential decline
Services
Application Services
BPO
Infrastructure Services
Contribution to
revenue (%)
59.7
26.3
14.0
Growth
QoQ (%)
9.3
(8.3)
(1.9)
Growth
YoY (%)
(0.4)
56.1
(15.8)
Source: Company, MOFSL
Exhibit 2: Baring North America, other geographies posted sequential growth
Geographies
North America
Europe
India
Rest of the World
Contribution to
revenue (%)
75.2
13.4
5.0
6.4
Growth
QoQ (%)
(1.0)
14.9
9.5
18.4
Growth
YoY (%)
5.6
16.2
6.5
6.8
Source: Company, MOFSL
Exhibit 3: ITCE was the growth driver in 4QFY21 while BCM lagged
Verticals
Banking and Capital Markets
Insurance
IT, Communication and
Entertainment
Logistics and Transportation
Others
Contribution to
revenue (%)
50.1
10.1
14.5
13.4
11.9
Growth
QoQ (%)
(3.6)
6.4
Growth
YoY (%)
17.5
(5.6)
15.9
3.4
8.7
(2.0)
5.8
(4.3)
Source: Company, MOFSL
Exhibit 4: Top client declined while other client buckets grew sequentially
Top client
Top 2-5 clients
Top 6-10 clients
Contribution to
revenue (%)
10.0
31.0
12.0
Growth
Growth
QoQ (%)
YoY (%)
(6.8)
(17.7)
9.6
32.7
2.5
42.7
Source: Company, MOFSL
15 May 2021
5
 Motilal Oswal Financial Services
Mphasis
Valuation and view
Impressive deal wins over the last three quarters and a healthy deal pipeline
would likely drive growth in the near term. While the DXC business (~12% of
revenue) related overhang persists, strong traction in Direct International
should continue to drive overall performance. The management’s guidance on
its ability to defend margin is a key positive.
The ability to win multiple large Digital transformation deals proactively and
under vendor consolidation scenarios indicates strength in its sales and delivery
capabilities.
Higher exposure to largely stable verticals (BFSI – ~60% of revenue) should help
mitigate risks to some extent.
The stock is currently trading ~19.5x FY23E EPS. We value the stock ~22x FY23E
EPS. Maintain Buy.
Exhibit 5: Over the long term, multiples average ~14x
30
20
10
0
P/E
Source: Bloomberg, MOSL
Exhibit 6: Revision to our estimates
FY21
74.1
1,309
5.6
16.1
12,166
64.2
Revised
FY22E
73.5
1,451
10.9
16.7
14,184
74.9
FY23E
74.5
1,640
13.0
18.0
17,376
91.7
FY21
74.0
1,306
5.3
16.1
12,172
64.4
Earlier
FY22E
73.5
1,456
11.5
16.8
14,303
75.7
FY23E
74.5
1,644
12.9
17.8
17,281
91.4
FY21
0.1%
0.2%
30bps
0bps
0.0%
-0.3%
Change
FY22E
0.0%
-0.3%
-60bps
-10bps
-0.8%
-1.0%
FY23E
0.0%
-0.2%
10bps
10bps
0.5%
0.3%
USD:INR
Revenue (USD m)
Growth (%)
EBIT margin (%)
PAT (INR m)
EPS
Source: MOFSL
15 May 2021
6
 Motilal Oswal Financial Services
Mphasis
Exhibit 7: Operating metrics
1QFY20
Geographical Contribution (%)
Americas
EMEA
India
RoW
Vertical Contribution (%)
Banking and Capital market
Insurance
IT, Comm. and Entertainment
Logistics and Transportation
Others
Revenue by Project Type (%)
Time and Material
Transaction Based
Fixed Price
Revenue by Delivery Location (%)
Onsite
Offshore
Secondary Market Segment (%)
Direct International
DXC
Others
Service Type (%)
Application services
BPO
Infrastructure services
Client Contribution (%)
Top Client
Top 2-5 Clients
Top 6-10 Clients
New Clients added
Clients Contributing More than:
Over USD100m
Over USD75m
Over USD50m
Over USD20m
Over USD10m
Over USD5m
Over USD1m
Headcount
Onsite - billable
Tech services
BPO
Offshore - billable
Tech services
BPO
Total billable headcount
Total headcount
78.8
10.7
5.0
5.5
44.7
11.7
16.6
12.9
14.2
63.1
13.3
23.6
58.2
41.8
73.2
24.6
2.2
65.4
15.0
19.7
14
24
9
14
1
2
4
7
14
27
72
2QFY20
79.2
10.1
5.3
5.4
45.8
11.2
16.1
13.4
13.4
59.7
14.3
26.0
58.2
41.8
73.8
24.1
2.1
64.0
16.3
19.7
14
24
9
8
2
2
4
7
14
29
76
3QFY20
77.5
11.5
5.1
5.9
45.5
11.2
15.7
13.9
13.6
57.8
15.5
26.7
58.1
41.9
74.2
23.4
2.4
61.0
18.1
20.9
13
25
9
14
2
3
5
7
15
30
77
4QFY20
76.3
12.3
5.0
6.4
45.7
11.4
15.0
14.6
13.2
56.9
15.2
27.9
57.1
42.9
75.4
22.5
2.1
64.1
18.0
17.8
13
25
9
9
2
3
5
7
15
31
76
1QFY21
76.8
11.9
4.1
7.1
48.8
10.0
14.1
14.0
13.1
58.7
15.2
26.1
59.9
40.1
78.5
20.1
1.5
63.8
21.1
15.1
12
27
9
6
2
4
4
7
16
32
79
2QFY21
78.1
10.8
4.5
6.5
53.4
9.5
11.8
12.3
13.0
59.1
15.8
25.1
58.7
41.3
81.8
16.2
2.0
59.0
26.5
14.5
12
27
11
5
2
4
4
8
17
31
80
3QFY21
77.9
12.0
4.7
5.5
53.3
9.7
12.9
12.6
11.5
59.0
16.8
24.2
58.0
42.0
84.7
13.1
2.2
55.9
29.4
14.7
11
29
12
6
2
4
5
9
16
35
81
4QFY21
75.2
13.4
5.0
6.4
50.1
10.1
14.5
13.4
11.9
57.5
15.5
27.0
56.9
43.1
85.8
12.0
2.3
59.7
26.3
14.0
10
31
12
8
2
5
5
9
18
37
84
4,648
522
11,832
3,983
20,985
25,500
4,708
822
12,550
4,094
22,174
26,964
4,575
1,244
12,780
4,553
23,152
27,289
4,221
1,199
12,734
4,286
22,440
26,398
3,783
1,382
12,473
4,592
22,230
26,143
3,357
2,715
12,358
4,519
22,949
27,148
3,474
3,081
12,558
4,854
23,967
28,116
4,172
3,083
13,101
4,971
25,327
29,473
Source: Company, MOFSL
15 May 2021
7
 Motilal Oswal Financial Services
Mphasis
Financials and valuations
Income Statement
Y/E March
Revenues
Cost of Goods Sold
SG&A Expenses
EBITDA
% of Net Sales
Depreciation
Other Income
PBT
Tax
Rate (%)
Net Income
FY16
60,808
44,612
7,199
8,997
14.8
810
1,662
9,849
2,661
27.0
7,188
FY17
60,763
43,649
7,426
9,688
15.9
791
2,247
11,144
3,077
27.6
8,067
FY18
65459
47,308.0
7,525
10,626
16
709
1,490
11,407
2,900
25
8,507
FY19
77311
55,754.0
8,317
13,240
17
759
1,592
14,073
3,339
24
10,734
FY20
88436
61,376.5
10,536
16,524
19
2,317
967
15,174
3,306
22
11,868
FY21
97222
67,723.0
11,472
18,027
19
2,418
696
16,305
4,139
25
12,166
FY22E
1,06,657
73,647
12,557
20,453
19.2
2,607
1,067
18,912
4,728
25.0
14,184
FY23E
1,22,171
82,701
14,538
24,932
20.4
2,986
1,222
23,168
5,792
25.0
17,376
(INR m)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Other long-term liabilities
Capital Employed
Net Block
CWIP
Goodwill
Investments
Other assets
Curr. Assets
Debtors
Cash
Investments
Other Current Assets
Current Liab. and Prov.
Sundry Liabilities
Provisions
Net Current Assets
Application of Funds
FY16
2,102
56,448
58,550
3,114
890
62,554
2,011
0
14,514
3,850
11,536
42,258
6,489
8,572
17,373
9,823
11,615
10,996
619
30,643
62,554
FY17
2,104
59,420
61,524
2,602
761
64,887
2,237
7
16,978
1,255
8,202
44,492
6,279
6,144
22,701
9,368
8,284
7,911
373
36,208
64,887
FY18
1,933
52,885
54,818
3,899
1,016
59,732
1,829
19
17,015
3,169
8,361
39,460
8,116
7,067
14,651
9,625
10,121
9,875
246
29,339
59,732
FY19
1,862
50,636
52,498
5,466
1,235
59,199
2,126
16
19,585
2,592
8,362
41,031
18,487
6,416
10,700
5,427
14,511
14,428
83
26,519
59,199
FY20
1,865
56,431
58,296
5,713
7,567
71,576
8,823
74
21,405
3,479
9,624
44,131
17,696
11,267
9,768
5,400
15,959
15,891
68
28,172
71,576
FY21
1,870
63,397
65,267
5,135
7,285
77,687
8,869
31
21,326
3,114
9,246
51,403
18,505
9,098
16,870
6,929
16,302
15,806
497
35,100
77,687
FY22E
1,870
69,070
70,941
5,135
7,486
83,561
7,862
31
21,326
3,114
9,837
59,958
21,331
12,421
18,870
7,336
18,568
18,248
320
41,390
83,560
(INR m)
FY23E
1,870
76,021
77,891
5,135
7,591
90,616
6,709
31
21,326
3,114
11,053
69,511
24,434
16,204
20,870
8,003
21,128
20,762
367
48,383
90,615
15 May 2021
8
 Motilal Oswal Financial Services
Mphasis
Financials and valuations
Ratios
Y/E
EPS
Cash EPS
Book Value
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Fixed Asset Turnover (x)
FY16
34.2
38.0
279.0
19.3
56.3
52.6
47.3
39.4
5.8
6.4
1.1
12.6
9.9
39
27.1
FY17
38.3
42.1
292.9
24.1
62.8
46.9
42.7
36.3
5.8
6.1
1.3
13.4
10.4
38
28.6
FY18
43.3
46.9
279.2
20.1
46.5
41.6
38.4
31.6
5.1
6.4
1.1
14.6
12.5
45
32.2
FY19
55.5
59.4
274.1
27.0
48.6
32.4
30.3
25.1
4.3
6.6
1.5
20.0
17.4
87
39.1
FY20
63.1
75.5
312.9
35.0
55.4
28.5
23.8
19.4
3.6
5.7
1.9
21.4
18.6
73
16.2
FY21
64.2
77.0
349.3
65.0
101.2
28.0
23.4
17.5
3.2
5.2
3.6
19.7
16.8
69
11.0
FY22E
74.9
88.6
379.7
45.5
60.8
24.0
20.3
15.2
2.9
4.7
2.5
20.8
17.7
73
12.7
FY23E
91.7
107.5
416.9
55.8
60.8
19.6
16.7
12.2
2.5
4.3
3.1
23.3
20.1
73
16.8
Cash Flow Statement
Y/E
CF from Operations
Chg. in Wkg. Capital
Net Operating CF
Net Purchase of FA
Free Cash Flow
Net Purchase of Invest.
Net Cash from Invest.
Proceeds from equity
Proceeds from LTB/STB and others
Dividend Payments
Net CF from Financing
Net Cash Flow
Exchange difference
Opening Cash Balance
Add: Net Cash
Closing Cash Balance
FY16
6,785
523
7,308
-1,222
6,086
-362
-1,584
0
3,009
-4,042
-1,032
4,692
-164
4,043
4,529
8,572
FY17
7,687
-1,045
6,641
-1,150
5,491
3,829
2,679
2
-6,683
-5,055
-11,735
-2,415
-13
8,572
-2,428
6,144
FY18
8,832
-1,502
7,330
-313
7,016
5,238
4,925
2
3,624
-15,010
-11,383
871
52
6,144
923
7,067
FY19
10,918
-1,421
9,497
-2,511
6,986
5,404
2,893
104
1,554
-14,604
-12,947
-556
-94
7,067
-651
6,416
FY20
12,788
422
13,210
-1,243
11,967
2,652
1,408
151
-3,863
-6,065
-9,777
4,842
10
6,416
4,851
11,267
FY21
14,999
-453
14,545
-1,252
13,293
-6,967
-8,219
268
-2,356
-6,527
-8,615
-2,288
120
11,267
-2,169
9,098
FY22E
15,725
-1,739
13,986
-1,600
12,386
-902
-2,502
0
0
-8,161
-8,161
3,323
0
9,098
3,323
12,421
(INR m)
FY23E
19,140
-2,321
16,819
-1,833
14,987
-778
-2,611
0
0
-10,425
-10,425
3,783
0
12,421
3,783
16,204
15 May 2021
9
 Motilal Oswal Financial Services
Mphasis
NOTES
15 May 2021
10
 Motilal Oswal Financial Services
Mphasis
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details
of
associate
entities
of
Motilal
Oswal
Financial
Services
Limited
are
available
on
the
website
at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and buy or sell
the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of
interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the
analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should be aware
that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant banking, investment
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
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This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
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and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
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is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
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Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
15 May 2021
11
 Motilal Oswal Financial Services
Mphasis
-
-
-
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific
recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there
might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider
demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not
considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research
analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The
Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and
the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform
or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is
already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
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licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose
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costs, damages,
expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai-
400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law
Tribunal, Mumbai Bench.
15 May 2021
12