Mphasis surges on open offer hopes

Mphasis rose 9.45% to Rs 241.50 at 11:07 IST on BSE on reports Hewlett-Packard was in talks to buy outsourcing firm Electronic Data Systems, which owns a majority stake in the Indian software firm.

On BSE, 3.62 lakh shares were traded in the counter. The scrip had an average daily volume of 60,398 shares in the past one quarter.

The stock hit a high of Rs 256 and a low of Rs 227 so far during the day. The stock had a 52-week high of Rs 335.90 on 2 July 2007 and the stock hit a 52-week low of Rs 150.25 on 24 March 2008.

The mid-cap scrip had underperformed the market over the past one month till 12 May 2008, gaining 4.13% compared to the Sensex's return of 6.66%. It had also underperformed the market in the past one quarter, declining 10.23% compared to Sensex's return of 1.52%.

The company's current equity is Rs 208.72 crore. Face value per share is Rs 10.

The current price of Rs 241.50 discounts its Q4 March 2008 annualised EPS of Rs 10.9, by a PE multiple of 22.15.

Hewlett Packard (HP) said it was in talks with Electronic Data Systems (EDS) regarding a possible business combination. HP was likely to pay $12 billion to $13 billion for EDS, in a deal, which would vault it to a close second to IBM in technology services reports added. If the deal fructifies, it will trigger the mandatory open offer for 20% stake in Mphasis, as per the Securities & Exchange Board of India (Sebi) takeover regulation. EDS holds 60.89% stake in Mphasis.

Mphasis's net profit declined 13.6% to Rs 56.9 crore on 7.6% rise in sales to Rs 484.19 crore in Q4 March 2008 over Q3 December 2007.

The company provides application services, business process outsourcing (BPO) services and infrastructure technology outsourcing (ITO) services