MphasiS Ltd. share price target

Mphasis' earnings remained resilient in Q3FY26, marked by continued momentum in strategic deal wins and robust execution across its core verticals. The quarter was supported by strong pipeline conversion, successful ramp-up of large deals and...

We met with the CFO of Mphasis to discuss AI, demand trends, large deals, and the balance sheet. Management’s key message was that the current AI debate is running ahead of business reality.

Broadly in-line performance in 3Q. Likely to have a robust 4Q exit QoQ. Likely high single digit USD growth in FY26. >2x Industry rate

Q3FY26 Performance: Mphasis reported revenues of US$ 451 mn, up 1.4% QoQ/ 7.6% YoY (up 1.5% QoQ/7.4% YoY in CC terms). Direct Revenue (97.9% of the mix) grew 1.9% QoQ/ 9.6% YoY in CC terms. Reported EBIT margin at 15.2%, was down ~6 bps QoQ/ ~11 bps YoY. Adjusted PAT (ex-one off from new labour code) stood...

Mphasis’s (MPHL) 3QFY26 revenue rose 1.5% QoQ in Constant Currency (CC), largely in line with our estimate of 1.3% QoQ CC. Direct revenue rose 1.9% QoQ CC and 9.6% YoY CC.

The likely loss of a top 5 customer (in the logistics space) has impacted growth but offset to an extent by BFSI and Technology verticals

Q2FY26 Performance: Mphasis reported revenues of US$ 445 mn, up 1.8% QoQ/ 3.6% YoY (up 2% QoQ/6% YoY in CC terms). Direct Revenue (97.5% of the mix) 2.2% QoQ/ 7.9% YoY in CC terms. The EBIT margin at 15.3%, was flat QoQ/ down ~10 bps YoY. PAT came at 469 crore (up 6.2% QoQ/ 10.8% YoY). It won a broad based...

Mphasis’s (MPHL) 2QFY26 net revenue rose 1.2% QoQ in Constant Currency (CC), largely in line with our estimate of 1.5% QoQ CC.

driven by its AI-driven growth initiatives and steady conversion of pipeline to revenue. Therefore, we reiterate our ACCUMULATE rating on the stock, with a revised target price of Rs. 3,113 based on 28x FY27E adjusted EPS....

Mphasis weak and volatile QoQ growth for many quarters was due to - high US mortgage rates, underinvestment in large deals, client specific

The revenue growth performance (+1.0% QoQ CC) was tad below our estimates (+1.4% QoQ CC), attributed to L&T business (down 46% QoQ) due to client-specific investments, which largely got offset through continued momentum in other parts of the portfolio. More importantly, the Direct business stood on a strong footing, grew 1.6% QoQ CC, led by BFS (+8.1% QoQ) and Insurance (+21.0% QoQ). The record high deal TCV of USD760m (80%+ New Gen) aided by four large deal wins in Q1 of three 100m+ TCV and one...

Mphasis demonstrated strong financial performance, with 2.9% q/q, 5.4% y/y revenue growth in CC, driven by significant contribution from the BFS sector (50% of revenue) and a sharp rebound in the Technology, Media & Telecommunications segment (18% of revenue).

Mphasis (MPHL)’s 4QFY25 gross revenue was 2.9% QoQ in Constant Currency (CC), in line with our estimate of 3.0% QoQ CC. Direct business grew 3.8%/6.8% QoQ/YoY in CC, aided by BFS and TMT.

The revenue growth performance (+2.9% QoQ CC) exceeded our estimates (+2.5% QoQ CC). ~80% of its portfolio mix maintained a steady state, while the rest of its business mix (L&T and Others) reported a decline of 8% and 3% QoQ, respectively. The continued improvement in large deal wins (13 large deals in FY25) and meaningful conversion of those deals are supporting the growth within BFSI. Despite having booked record high deal TCV of USD390m (11% QoQ), the deal funnel still looks encouraging (26% QoQ and 86% YoY). Even...

3QFY25 has yet again proven the volatility in Mphasis's business compared to its Tier-2 peers like Persistent & Coforge

Mphasis (MPHL)’s 3QFY25 revenue was 0.1% QoQ in Constant Currency (CC), in-line with our estimate of 0.2% QoQ CC. Direct business grew 0.2%/5.1% QoQ/YoY in CC, aided by Insurance and TMT. TCV was up 70% QoQ to USD351m.

Mphasis (MPHL)’s 2QFY25 revenue was 2.5% QoQ in Constant Currency (CC), which was above our estimate (+2 % QoQ CC). Direct business grew 2.4%/6.2% QoQ/YoY in CC, aided by TMT and BFS.

Revenue and EBIT margin broadly in line. TCV a tad soft deals getting pushed back on greater scrutiny on spending by clients on AI projects.

MPHL’s Q1FY25 growth missed our estimates with a marginal revenue decline of 0.1% cc. BFS turnaround did not materialise in this quarter as well, with just 1.4% growth QoQ, lower than even Q4FY24 print of 2.5%.