Mphasis Q3 FY26 Results: Modest Revenue Growth But Profitability Pressured by Labour Law Charge

Mphasis Limited reported a **2.6% quarter-on-quarter and 12.4% year-on-year increase in revenue** for Q3 FY26, with **consolidated revenue reaching ₹4,002.6 crore** for the quarter ended December 31, 2025, reflecting steady topline growth supported by direct business momentum and healthy deal traction. On a **constant currency basis**, revenue grew **1.5% sequentially and 7.4% year-on-year**, while **direct revenue** rose **3.1% QoQ and 15.9% YoY** on a reported basis, indicating improving execution across key client accounts. However, profitability was **impacted by a one-time charge of ₹35.5 crore** arising from changes in India’s labour laws, which affected employee benefit-related costs. This exceptional item weighed on earnings, leading to a **5.7% sequential decline in net profit** to **₹442.2 crore**, although profit still increased **3.4% on a year-on-year basis**. Operating performance remained stable, with **operating margin at 15.2%**, marginally lower by 10 basis points both quarter-on-quarter and year-on-year. Deal momentum remained a key positive. Mphasis reported **new Total Contract Value (TCV) wins of USD 428 million** during the quarter, with **64% of deals coming from new-generation services**, highlighting strong traction in digital, cloud, and AI-led offerings. The company secured multiple large engagements, including transformation programs for global banks, healthcare platform modernisation, mortgage fulfilment services, and a global remittance initiative. Management highlighted that **Mphasis NeoIP** continues to strengthen the deal pipeline and wallet share, supporting medium-term growth visibility. *Disclaimer: This article is for informational purposes only and does not constitute investment advice.*