GOOD EVENING!!
2 IT Stocks to Hold
Mphasis Ltd (NS:MBFL)
Established in 1992, #MPHASIS offers infrastructure technology and applications outsourcing services, architecture guidance, application development and integration, and application management services. It serves telecom, logistics, technology industries, and financial services firms. The company's customer base includes the top 6 global banks, 11 out of 15 top mortgage lenders, and three top global insurance companies. The company's core reference architectures and tools and niche domain expertise in Banking, Financial Services & Insurance (or BFSI) verticals and solid customer relationships yielded above-average industry growth in the Direct International segment.
IT companies' growth relies much on the number of overseas clients and the size of deals. In Q1FY2022, Mphasis won a large deal of $250.0 million. The average deal size of large deals has gone up to $96 million in the first quarter of fiscal 2022 from $38 million in Q1FY2021. The company has four clients in more than $100 million categories in the quarter ended June 2021 compared to 2 in its corresponding quarter of the previous year. Mphasis added 3 clients in $50 million+ category, 7 clients in $5million+ category and 5 clients in $1million+ category on a year-on-year basis in Q1FY2022. It witnessed a healthy conversion of 60% to 70% clients at each stage to the next stage. The company has maintained a solid track record in winning large deals marked by increasing-sized and longer-tenure deals. It is on a path to increase market share by securing key clients and sustained growth in Europe.
In Q1FY2022, Mphasis revenue grew at 18.8%, operating profit increased 21.9%, and EPS grew 23.1% o a year-on-year basis. Its operating cash flows as a percentage of profit after tax depicts a rising trend. Plus, the company has displayed broad-based growth across all verticals in the quarter ended June 2021. Promoters' stake in the company grew from 52.23% in June 2019 to 55.99% in June 2021. No wonder the stock gained 130.1% in a year, 63.5% in six months, 26.5% in a month, and 7.9% in five days.
Zensar Technologies Ltd (NS:ZENT)
Zensar Technologies develops software and provides IT consulting and allied services. The company's expertise lies in major verticals such as financial services, telecom, logistics, manufacturing, retail, and utilities. It provides end-to-end solutions across broad industry domains and comprehensive technology platforms through a global delivery model, which offers services 24x7. #ZENSARTECH acquisition of Arizona's headquartered M3bi will strengthen the former's capabilities in data engineering & analytics and advanced engineering services. It will provide Zensar to expand its experience services to M3bi customers. Plus, M3bi will be able to leverage Zensar's digital engineering capability. The company sits on $183.2 million highest ever net cash in the quarter ended June 2021.
Zensar's FY2017-21 CAGR for total gross income, EBITDA, and profit after tax was 7%, 10.1%, and 8.9%, respectively. FII's holding was 17.1% in June 2021, up from 16.02% in March 2021. MFs' holding increased a sharp 7.59% in June 2021 to 9.17% from 1.58% in March 2021. Again, no wonder the stock was up 162% in a year, 60.5% in six months, 26.9% in a month, and 2.8% in a day based on July 26 closing price.
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