Mumbai, July 10: HP-controlled IT services provider Mphasis today said it would transfer a portion of its domestic BPO business to Karvy Data Management Services Ltd as it looks to focus on select niche areas to raise margins.

Following the agreement, over 2,000 employees will be transferred to Karvy, Mphasis told the stock exchanges today.

The announcement led to the shares of Mphasis finishing at Rs 404.30 on the BSE, a gain of over 2 per cent from the previous close.

Less than a fortnight ago, Mphasis had sold a significant part of its business process management business to the Hindujas. The agreement led to the transfer of over 7,000 employees, or roughly two-third of its domestic voice business, to Hinduja Global Solutions.

The acquisition strengthened Hinduja Global Solutions' presence in the country in telecom and banking & financial services. It also gave the company seven delivery centres across six cities.

These transactions follow the identification of digital and global risk & compliance as the Mphasis's new focus areas for the next three years. These verticals are expected to constitute more than 50 per cent of the company's direct international revenue by 2018. The company is also looking at margins of 14-16 per cent.

Mphasis, which posted consolidated net revenues of Rs 5,795 crore for the year ended March, has seen a decline in business from HP over the past 16 quarters. During the quarter ended March, HP's business witnessed a fall of 9 per cent on a sequential basis. Business from HP accounts for nearly 31 per cent of its revenues.

"Specialisation and consistent strategy execution holds the key to success. This agreement offers tangible proof of our commitment to execute our strategic road map," CEO Ganesh Ayyar said.