Mid tier IT company Mphasis has seen a run that would beat any of the hallowed top rung IT players - sales growth in the last five years compounded at an annual rate of 40 per cent, PAT grew phenomenally higher 48 per cent. Of course, it has a low base advantage to its side.
HP has a controlling stake in Mphasis (62 per cent). The company came under fire early last year after it failed to disclose that a large order from HP was non-recurring in nature. The stock promptly lost 30 percent as a result and has not fully recovered from that decline.
Things are looking up. Mphasis’s foray into newer segments of technology consulting, imaging and printing and non enterprise segments is expected to start paying off from FY13. Margin expansion is also expected. Talk of potential acquisitions and/or buyback are doing the rounds. At a PEG ratio of 0.27. Buy.