Mphasis Ltd (MPHASIS)
🎯 Key Takeaways
- Mphasis Ltd is transitioning from a period of muted growth to a reinvigorated expansion phase driven by AI-led demand and a robust deal pipeline, despite a challenging macro environment. Management is targeting high single to low double-digit revenue growth for FY27 while maintaining disciplined margin execution within its long-standing 14.
- Revenue grew 3.3% QoQ to ₹4,384 in Q1FY27.
- ⚠️ SEBI non-compliance penalties remain a concern, with pending waiver applications for fines from December 2025 and January 2026 that could impact cash
📖 The Story
Mphasis Ltd is transitioning from a period of muted growth to a reinvigorated expansion phase driven by AI-led demand and a robust deal pipeline, despite a challenging macro environment. Management is targeting high single to low double-digit revenue growth for FY27 while maintaining disciplined margin execution within its long-standing 14.75%-15.75% operating margin band. The company’s financial performance shows sequential improvement in revenue and profitability, supported by strong cash flow conversion and a conservative capital structure.
📰 What's Happening
In Q1FY27, Mphasis reported revenue of ₹471 crores, up 9.9% YoY and 2.2% QoQ, with AI-driven deals contributing significantly to growth across TMT and Retail segments. The company added three large deals, including a $100 Mn+ contract, and expanded its deal pipeline by 28% YoY to record levels. Management highlighted that Q2FY27 is expected to deliver the best sequential growth in constant currency over the past three years, with growth and margin sustainability prioritized amid macro uncertainty.
Source: Stock Announcements
📊 Quarterly Results (₹ Cr)
| Metric | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|
| Revenue | 3,902 | 4,003 | 4,243 | 4,384 |
| Operating Profit | 596 | 609 | 652 | 648 |
| OPM % | 15.3% | 15.2% | 15.4% | 14.8% |
| Net Profit | 469 | 442 | 510 | 490 |
| EPS | ₹24.65 | ₹23.22 | ₹26.73 | ₹25.65 |
Revenue growth has accelerated from ₹4,003 crores in Dec 2025 to ₹4,384 crores in Jun 2026, with operating margins holding steady at 14.8% despite inflationary pressures. Net profit and EPS have shown improvement, rising to ₹490 crores and ₹25.65 respectively in the latest quarter, up from ₹442 crores and ₹23.22 in the prior year quarter. This performance aligns with management’s focus on margin discipline and cash flow conversion, which reached 80% in Q1FY27, underscoring operational efficiency.
🔮 Management Outlook & What's Next
Management has raised its FY27 growth outlook to high single to low double digits, citing record pipeline and strong execution momentum in AI-led transformations. The company expects to sustain margins within the 14.75%-15.75% band and deliver best-ever sequential growth in Q2FY27 in constant currency terms. Forward-looking commentary emphasizes disciplined execution, AI adoption, and resilience amid macro headwinds, with no indication of guidance revision downward.
Extracted from official company announcements. Not StockFin.ai's opinion.
🏦 Balance Sheet (₹ Cr)
| Item | Mar 2025 | Mar 2025 | Mar 2026 | Mar 2026 |
|---|---|---|---|---|
| Equity Capital | 189 | 190 | 190 | 191 |
| Reserves | 8,480 | 9,438 | 9,432 | 10,553 |
| Borrowings | 1,820 | 1,888 | 1,979 | 1,793 |
| Total Liabilities | 13,582 | 14,907 | 16,273 | 17,782 |
| Fixed Assets | 912 | 822 | 821 | 6,435 |
| Investments | 2,123 | 2,208 | 1,464 | 1,769 |
| Total Assets | 13,582 | 14,907 | 16,273 | 17,782 |
The balance sheet reflects a stable capital structure with equity remaining flat at ₹190 crores and reserves growing to ₹10,553 crores as of Mar 2026, indicating retained earnings accumulation. Borrowings have been managed prudently, declining to ₹1,793 crores from ₹1,979 crores YoY, supporting a low debt-to-equity ratio of 0.17. This suggests a conservative approach to leverage, with room for strategic investments or capital returns if needed.
💰 Cash Flow Statement (₹ Cr)
| Item | Mar 2026 |
|---|---|
| Operating | +1,253 |
| Investing | -211 |
| Financing | -943 |
| Net Cash Flow | +99 |
👥 Shareholding Pattern
| Category | Q2FY26 | Q3FY26 | Q4FY26 | Q1FY27 |
|---|---|---|---|---|
| Promoters | 40.1% | 30.6% | 30.6% | 30.5% |
| FII | 18.5% | 19.8% | 19.5% | 19.5% |
| DII | 37.1% | 45.3% | 45.7% | 45.3% |
| Public | 3.0% | 3.0% | 2.9% | 3.1% |
| # Shareholders | 1,45,611 | 1,40,263 | 1,32,916 | 1,31,941 |
Institutional investor interest has increased, with DII holdings rising to 45.31% in Q1FY27 from 37.07% in Q2FY26, while FII holdings remained stable around 19.5%. Promoter holding declined slightly to 30.54% from 40.1% in Q2FY26, likely due to ESOP-related dilution. The growing DII stake and stable institutional base suggest confidence in the company’s strategic direction, though the rise in shareholder count to over 130,000 indicates retail investor engagement.
⚖️ Peer Comparison — IT - Software
| Company | MCap (₹ Cr) | P/E | ROCE | ROE | D/E |
|---|---|---|---|---|---|
| TCS | 8.56 L Cr | 17.2 | 63.2% | 46.7% | 0.00 |
| INFY | 4.68 L Cr | 15.6 | 44.9% | 32.7% | 0.00 |
| HCLTECH | 3.67 L Cr | 21.0 | 31.6% | 23.2% | 0.00 |
| WIPRO | 1.80 L Cr | 14.4 | 18.1% | 15.1% | 0.19 |
| TECHM | 1.60 L Cr | 28.2 | 24.8% | 17.4% | 0.00 |
| LTM | 1.37 L Cr | 26.1 | 30.5% | 21.6% | 0.00 |
| OFSS | 1.06 L Cr | 30.9 | 60.3% | 43.6% | 0.00 |
| PERSISTENT | 91,416 | 47.0 | 32.7% | 24.5% | 0.00 |
| COFORGE | 87,786 | 40.3 | 25.6% | 20.7% | 0.04 |
| MPHASIS | 47,828 | 25.0 | 22.3% | 17.8% | 0.17 |
⚠️ Risk Factors
1. SEBI non-compliance penalties remain a concern, with pending waiver applications for fines from December 2025 and January 2026 that could impact cash flows if not resolved. 2. Margin pressure could emerge if large deal execution falters or pricing power erodes in a competitive IT services market. 3. Rising employee stock option grants may dilute existing shareholders over time, potentially affecting per-share metrics. 4. Macro headwinds in key markets could delay the anticipated momentum in AI-led deal conversions.
📋 Recent Filings
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🔴 Announcement 21 August 2026MphasiS Limited announced on 21 August 2026 that its ESOP Compensation Committee approved the grant of 415,060 stock options under the ESOP 2016 plan ...
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Announcement 14 August 2026MphasiS Limited announced that independent ESG rating agency SES ESG Research assigned an adjusted ESG score of 72.6 (Grade B) for FY 2025-26, down fr...
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Announcement 7 August 2026MphasiS Limited announced its participation in three upcoming investor conferences in August 2026, including Emkay Confluence, Equirus Annual India Co...
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Announcement 6 August 2026MphasiS Limited announced that Crisil ESG Ratings & Analytics independently upgraded its overall ESG rating from Crisil ESG 64 to Crisil ESG 67 and it...
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🟡 Board Meeting 31 July 2026MphasiS announced on 31 July 2026 that its ESOP Compensation Committee approved the allotment of 3,606 equity shares under the Employee Stock Options ...
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Announcement 28 July 2026MphasiS reported Q1 FY27 revenue of $471 million, up 8.3% YoY in constant currency, driven by strong AI-led deal momentum with $461 million in net new...
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🔴 Insider Trading 27 July 2026MphasiS Limited disclosed on May 19, 2026, that it refinanced existing financing arrangements by releasing encumbrances on current lenders and creatin...
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🔴 Financial Results 24 July 2026MphasiS Limited announced that the audio recording of its investor and analyst call held on July 24, 2026, regarding quarterly financial results for t...
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🟡 Board Meeting 24 July 2026MphasiS board addressed SEBI non-compliance notices for Q1 FY26, reiterating adherence to Regulation 17 while noting pending waiver applications for D...
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🔴 Financial Results 24 July 2026MphasiS reported Q1FY27 revenue of **₹471 crores**, up 9.9% YoY and 2.2% QoQ, driven by AI-led deals and strong growth in TMT and Retail segments. Ope...
🧠 Analyst's Read
Mphasis is executing a credible turnaround supported by AI-driven growth, strong pipeline, and disciplined financial management, but near-term performance hinges on successful closure of large deals and resolution of regulatory matters. Investors should monitor Q2FY27 results for sustained momentum and updates on SEBI waiver outcomes as key near-term catalysts.
Based on filing content and financial data. Not a recommendation.
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Data sourced from stock announcements. Analysis generated by StockFin.ai.
For informational purposes only — not investment advice. Updated 2026-09-02.
Editorial & Data Transparency Notice
This analysis was programmatically compiled using StockFin AI utilizing official regulatory disclosures from the BSE and NSE. Content is automatically synthesized and audited against public financial filings. StockFin.ai is an educational research platform and is NOT a SEBI-registered investment advisor or research analyst.
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