(Reuters) – Indian software services company Mphasis posted a bigger-than-expected rise in third-quarter profit on Thursday, aided by strong deal wins in its banking segment.
The company’s consolidated net profit grew nearly 15% to 4.28 billion rupees ($49.54 million) for the quarter ended Dec. 31 compared with analysts’ expectations of 4.26 billion rupees, according to data compiled by LSEG.
Mphasis’ quarterly revenue of 35.61 billion rupees was about 7% higher than last year, but missed analysts’ estimates of 35.70 billion rupees.
U.S. client spending in the banking and financial services (BFS) segment has been recovering slowly since the Federal Reserve began its rate easing cycle in September.
The segment — which accounts for nearly half of Mphasis’ overall revenue — saw an almost 9% revenue growth during the quarter driven by higher customer spending and gradual recovery in mortgage business, the company said.
The company’s total contract value (TCV) grew 46% to $351 million during the quarter.
India’s $254 billion IT services sector has been cautiously optimistic post third quarter results on early signs of a revival in domestic discretionary spending, after a period of sluggish growth due to inflationary pressures and geopolitical uncertainty.
Indian IT firms, which rely heavily on the U.S. for their revenue, have also been optimistic about President Donald Trump’s second term, due in part to his proposals of lowering taxes and removing regulations.
Mphasis’ technology, media and telecom (TMT) segment revenue grew near 13% during the quarter, driven by continued order wins.
Shares of the company closed nearly 4% higher ahead of results.
($1 = 86.3890 Indian rupees)
(Reporting by Ananta Agarwal and Ashna Teresa Britto in Bengaluru; Editing by Sahal Muhammed)
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