Stock prices of IT firm Mphasis gained by more than 5% on Friday after the company said its board would consider buyback of equity shares on January 31.
Stock prices of IT firm Mphasis gained by more than 5% on Friday after the company said its board would consider buyback of equity shares on January 31. The stock opened in the green on the BSE and hit day’s high at Rs 564.60. Volumes rose after the price started rising. Compared with the 30-day average volume of 97 thousand shares, the volume increased over 4.5 times to 3.2 lakh shares.
In a year, the share price of Mphasis advanced by over 24% to Rs 560.55 at Friday’s close from Rs 451.70 on January 28, 2016.
In a filing to the BSE on January 25, the company said, “Mphasis has informed that a meeting of board of directors of the company is being convened on January 31, inter alia, to consider a proposal for buyback of the equity shares, in accordance with the applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998.”
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The company reported a consolidated net profit of Rs 210.73 crore for the quarter ended September, against Rs 204.34 crore in the sequential quarter ended June.
At the current price, the stock is trading at 15 times of its trailing 12-month earnings per share and 1.75 times its book value.
“There has been significant addition to visibility post the announcement of Blackstone’s acquisition of HPE’s stake and a revenue commitment by HP to the tune of $990m in cumulative revenue over a five-year period. Impressive execution in Direct International business lends visibility of above-industry growth in 55% of Mphasis’s business,” said a Motilal Oswal report published in November 4.