Mphasis Limited: Comprehensive Stock Analysis Report | Scrolls
- Editor
- Sep 17
- 2 min read
by KarNivesh | 17 September, 2025
Mphasis Limited – Stock Analysis Overview
Mphasis Limited, a mid-tier Indian IT services firm headquartered in Bengaluru, has established itself as a specialist in Banking, Financial Services & Insurance (BFSI) and AI-driven digital transformation. Founded in 1992, the company today operates in 21 countries with around 37,500 employees, leveraging its "Front2Back™ Transformation" approach to deliver scalable cloud and cognitive services.
Business Segments and Strategy
The company’s revenue is concentrated in BFSI (62.7%), serving six top global banks and eleven leading mortgage lenders. Other verticals include Technology & Media (13.2%), Logistics & Transportation (13.2%), and diversified sectors (10.9%). Mphasis has carved a niche through Mphasis.AI, a dedicated unit driving artificial intelligence adoption. This strategy has already shown results: in Q1 FY26, 68% of deal wins were AI-led.
Financial Performance
For Q1 FY26, Mphasis reported:
Revenue: ₹3,813.44 crores (+9.2% YoY, +0.4% QoQ)
Net Profit: ₹441.70 crores (+9.2% YoY, –1.1% QoQ)
EBITDA: ₹783.82 crores (+13.25% YoY)
EPS: ₹23.10 (+8.5% YoY)
Cash & Equivalents: ₹1,612.58 crores
The company maintains an operating margin of 15.3% and net margin of 11.6%. However, receivables management remains a concern with a debtors turnover ratio of 5.01 times.
Full-year FY26 revenue is projected at ₹15,250 crores, modestly higher than FY25’s ₹14,540 crores, aligning with industry-wide IT growth expectations of 3–5%.
Deal Wins and Market Momentum
Mphasis achieved record contract wins worth $760 million (₹63,460 crores) in Q1 FY26 — its highest-ever quarterly performance and a 138% YoY jump from the prior $320 million (₹26,720 crores) average. Notably, 68% were AI-led deals, with four large contracts above $50 million (₹4,175 crores), including three exceeding $100 million (₹8,350 crores). BFSI orders rose 47%, while non-BFSI segments surged 108%, underscoring strong momentum across verticals.
Valuation and Peer Comparison
Mphasis trades at a P/E ratio of 32.53, much higher than TCS (23.0x), Infosys (23.2x), and HCL Tech (23.7x). Its market capitalization is ₹56,616 crores, ranking it 10th among Indian IT companies. While significantly smaller than giants like TCS (₹11,38,055 crores) and Infosys (₹6,27,875 crores), its mid-tier agility is a strength.
Dividend yield stands at 1.92%, lower than TCS (4.0%), reflecting Mphasis’ preference for reinvestment and growth. Promoters (Blackstone Group) hold 40.1%, mutual funds 24.28%, FIIs 19%, insurance companies 11.78%, and retail investors 4.4%. Blackstone’s backing stems from its ₹8,350 crores ($1 billion) acquisition of a majority stake in 2016.
Risks and Concerns
Mphasis faces several risks:
Heavy reliance on US (81% of revenues), exposing it to geopolitical and policy risks.
Premium valuations that demand consistent high growth.
Industry cyclicality, especially in BFSI.
FX pressures and competition-driven margin constraints.
Talent attrition and receivables management challenges.
Conclusion
Mphasis is a high-growth, AI-focused IT company well-positioned to benefit from rising digital transformation demand. Its BFSI expertise, record-breaking deal wins, and AI leadership present strong growth opportunities. However, premium valuation, geographic concentration, and mid-tier scale limitations introduce volatility. For investors with higher risk tolerance, Mphasis offers a promising but cyclical growth story.
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