Latest news with #Blackstone
Mint
7 hours ago
- Business
- Mint
Mphasis to lose FedEx business accounting for 8% of total revenue
Mphasis Ltd has lost one of its oldest clients, which accounted for 8% of the revenue of India's seventh-largest information technology services firm, after FedEx Corp. selected Accenture Plc to do much of its IT work. This loss presents a fresh challenge for CEO Nitin Rakesh to replace the loss in business in a challenging economic environment. Three people familiar with the development said FedEx, which accounted for $130 million of Mphasis's $1.61 billion in revenue for the year ended March 2024, will end its business arrangement with the Bengaluru-based IT firm by the end of the year after a ten-month transition period. At its peak in FY2024, FedEx accounted for $35 million of Mphasis's revenue in a quarter; business from the logistics giant is expected to be nought by the end of 2025. Also Read: TCS revenue from Tata Group companies nears $1 billion This development could significantly impact Blackstone's plans to exit Mphasis. In 2016, Blackstone spent up to $1.1 billion to acquire 60.2% of the shares of the promoter, Hewlett-Packard, becoming the majority owner of Mphasis. In 2017, Nitin Rakesh assumed the role of CEO. Over the last nine years, Blackstone has cut its holdings to 40.14%. A loss in business from FedEx could hinder Mphasis's overall growth in the current fiscal year, making it more challenging for the New York-headquartered private equity giant to sell its holdings. Mintindependently could not ascertain the reason behind FedEx ending its over two-decade-old business ties with Mphasis. Nonetheless, FedEx is the third-largest client of Mphasis after banking giants JPMorgan Chase & Co. and Charles Schwab Corp. Mphasis's five largest clients accounted for 42% of its total revenue last year, according to the company's disclosure. JP Morgan brought in 14% of Mphasis's total business, while Charles Schwab, FedEx and two others accounted for 28%, according to an executive. Mphasis did not answerMint's questionnaire on the FedEx account and said it continues to have a 'robust and expanding pipeline." Mphasis optimistic 'As you are aware, we do not comment on individual client contracts," said a spokesperson for the company on Friday. 'We have a robust and expanding pipeline, with overall growth reaching 86% year-over-year and 26% sequentially in the fourth quarter (Q4FY25), marking the highest quarterly increase in the past 12 quarters. We also have a healthy pipeline, with non-BFS (banking and financial services) jump of 99%, significantly contributed by logistics and travel. Our large deals pipeline also saw a significant surge, rising 40% sequentially and 154% year-over-year, reflecting focused execution." Emails sent to FedEx and Accenture on 28 May went unanswered. Mphasis reported a 4.4% revenue growth last year to $1.68 billion, followed by a 6.3% revenue decline in the year ended 2024. This comes at a time when two of its other rivals have also witnessed slow business with their largest clients: Sonata Software Ltd, which ended with $1.2 billion in revenue last year, andLTIMindtreeLtd, which ended with $4.49 billion in revenue. Also Read: Tech Mahindra appoints Santosh Jha to lead GCC push amid industry-wide shift Mphasis's issue with one of its large accounts comes at a time when a few of its peers, including Sonata Software and LTIMindtree, faced problems with their large accounts. Sonata said it was likely to record lower-than-expected revenue from its 'largest client" Microsoft Corp, for January-March 2025, as reported byMinton 4 May. The sixth-largest IT firm, LTIMindtree, admitted to getting lower revenue from Microsoft as it passed productivity gains to the tech giant. Microsoft fetched upwards of $50 million and $100 million for LTIMindtree and Sonata Software, respectively. Still, Mphasis's management appeared guarded in response to questions raised on revenue decline from a top client. Explaining it away 'The decline you're seeing is not linked to any one customer," CEO Rakesh told analysts in a post-earnings interaction with analysts on 24 January, when asked about the decline in business from its largest clients. 'Some of it was expected, but it's not just one customer-led. I don't think it is constructive to over-index the conversation on 'a customer.' As I said, right, we are aware of all the speculation and the rumours. 'The talk of FedEx ramping down or cutting its partnership with Mphasis was making the rounds since last September," said a Mumbai-based analyst on condition of anonymity. 'They are trying to offset the loss through another big logistics player." This decline from FedEx suggests that large multinational companies are reassessing their tech strategies in the wake of Gen AI and an uncertain macroeconomic environment caused by US President Donald Trump's tariff reversals. Also Read: Infosys-Cognizant trade-secrets battle nears end as Dallas court passes order Last year, Mphasis's 4.43% growth was the slowest among all its mid-cap rivals, includingPersistent Systems Ltd andCoforge Ltd, which grew 18.8% and 31.9%, respectively. Worryingly for Mphasis investors, it was the only mid-cap company to report a decline in headcount, even as its rivals expanded their workforce. Mphasis ended the year with 1,222 fewer people, having 31,442 employees. To be sure, Bengaluru-headquartered Mphasis has seen a decline in business from logistics and transportation companies since March 2023. Revenue from these companies, which accounted for 13.3% of the total at the end of March 2023, comprised 12.5% of overall revenue last year.
Yahoo
9 hours ago
- Business
- Yahoo
Taser Boss Tops Ranking of Highest-Paid CEOs, With $165 Million. Here's the List.
Stock award propelled Rick Smith past Apple's Tim Cook and Blackstone's Schwarzman to the top of WSJ's annual ranking.
Fashion Network
19 hours ago
- Business
- Fashion Network
Zara founder Ortega buys Barcelona office building for $283 million, sources say
Zara founder Amancio Ortega has bought an office building in Barcelona from Blackstone for €250 million ($283 million), two sources familiar with the transaction said on Friday. The sources said Blackstone sold the 28,000-square-meter building on Avenida Diagonal—currently rented by the Spanish editorial business Planeta—to Ortega's investment vehicle Pontegadea. Pontegadea and Blackstone did not comment on the agreement. Pontegadea, which owns more than $20 billion in real estate assets, has invested in several office towers and luxury buildings across Europe and North America. It has also diversified its portfolio by buying energy and logistics assets. Ortega controls 59.29% of Zara-owner Inditex through Pontegadea Inversiones and Partler Participaciones. ($1 = €0.8826)
Time of India
a day ago
- Business
- Time of India
Zara's founder buys office building in Barcelona for $283 million: Sources
MADRID: Zara founder Amancio Ortega has bought an office building in Barcelona from Blackstone for 250 million euros ($283 million), two sources familiar with the transaction said on Friday. Blackstone sold the 28,000-square-metre building on Avenida Diagonal , currently rented by the Spanish editorial business Planeta, to Ortega's investment vehicle Pontegadea, the sources said. Pontegadea and Blackstone did not comment about the agreement. Pontegadea, which owns more than $20 billion of real estate assets, has invested in several office towers and luxury buildings in Europe and North America. It has also diversified its portfolio by buying energy and logistics assets. Ortega controls 59.29% of Zara-owner Inditex through Pontegadea Inversiones and Partler Participaciones.
Business Times
2 days ago
- Business
- Business Times
Blackstone lowers offer for warehouse Reit, extends deadline
FUNDS managed by Blackstone have lowered an offer to purchase Warehouse real estate investment trust (Reit) Plc after matters uncovered in due diligence made a previous bid unworkable, according to a statement. Blackstone submitted a final offer of 110.6 pence per share on May 19, valuing the real estate trust at roughly £470 million (US$633 million), according to a statement from Warehouse Reit on Friday (May 30). That is down from a previous proposal of 115 pence per share. Blackstone informed Warehouse Reit's board earlier this month it would not proceed with its offer following its due diligence procedures. In particular, Blackstone highlighted varying views on the value of a development asset at Radway Green. Blackstone's deadline for its firm bid has been extended to Jun 6 to provide for finalizing terms and conditions, according to the statement. The alternative asset manager has been vying to take over Warehouse Reit for months. BLOOMBERG
