MPHASIS

Delivers Margin Stability Amid Expanding AI Pipeline

is entering a stronger growth phase, powered by rising demand for AI Ops, GenAI, and Data Modernisation. With record deal wins, margin stability, and a broad-based pipeline, the company is well-positioned to deliver above-industry growth, though revenue conversion and demand visibility remain key monitorables. - AI-Led Growth Cycle Emerging Mphasis is increasingly winning larger, outcome-linked deals in GenAI and Agentic AI. About 42% of recent wins were AI-led, reflecting strong client confidence in its next-gen offerings. This positions the company as a key beneficiary of AI-driven enterprise transformation. Revenue grew 2% in constant currency, driven by Technology, Media & Telecom (TMT) and insurance verticals. Logistics & transportation remained weak but showed sequential stability. Geographically, the Americas contributed 83% of revenue, while EMEA showed early signs of recovery after softness. EBIT margin improved 440 bps sequentially, landing within the guided 14.75–15.75% band. Healthy utilisation (92% onsite, 87% offshore ex-trainees) and a 60% YoY rise in fixed-price contracts underpin margin stability. A one-time logistics investment impacted Q2 but is expected to normalise. Q2 TCV hit $528 million, up 155% YoY, marking the second consecutive quarter above $500 million. H1FY26 TCV reached $1.3 billion, surpassing FY25’s full-year tally. Wins included six large deals, with two above $50 million and one $100 million, plus a new BFS client. Mphasis expects to deliver more than 2x industry growth in FY26, with strong BFS traction and recovery in logistics by Q3. While furloughs may pose near-term challenges, steady revenue conversion from robust TCV wins should support growth. At ~₹2,908 CMP, valuations appear reasonable, supporting gradual accumulation.