MPHASIS - Mphasis Limited Share Price

Management of Mphasis provided a strong outlook following their Q2 FY 2026 earnings call held on October 31, 2025. They emphasized continued focus on scaling AI-led propositions and expanding the NeoIPâ„¢ suite of agents while targeting double the industry growth rates. Management expects growth to exceed 2x the industry average, supported by their robust pipeline and steady conversion of TCV wins into revenue. They highlighted a second quarter TCV of $528 million, reflecting sustained momentum with six large deal wins, including one exceeding $100 million and two over $50 million.

Key projections outlined by management include:

1. Anticipated TCV wins for H1 FY26 already surpassing the entire FY25 total, with a trailing 12-month TCV of over $2 billion.
2. Revenue for Q2 coming in at $445 million, representing a sequential increase of 2% and 6% YoY in constant currency terms, marking the highest quarterly revenue in the company's history.
3. The BFS pipeline growing 45% YoY and the non-BFS pipeline increasing by 139% YoY, indicating strong momentum across verticals.

Management outlined a stable operating EBIT margin target in the range of 14.75% to 15.75%, and they are committed to maintaining this despite ongoing investments for growth. They noted that approximately 42% of TCV wins in Q2 were AI-led, underlining a strategic shift in demand. Overall, Mphasis remains optimistic about converting its strong pipeline into tangible revenue growth as deal ramp-ups progress in the coming quarters.

Question 1

Sudheer Guntupalli: "Any update on the furlough front, how we expect the next two quarters to pan out?"

Nitin Rakesh: "The impact of the ATM business was more YoY than QoQ, with stable growth in BFS. We expect growth in Q3, influenced by deal ramp-ups. Seasonality is uncertain, but given our shift toward fixed pricing, we may optimize performance. Overall, I forecast decent growth in the second half of the year."

Question 2

Nitin Padmanabhan: "Is the recently announced deal in the Logistics vertical the large one previously mentioned, and will it achieve double-digit growth?"

Nitin Rakesh: "Yes, we expect sequential growth in Logistics, but reaching double-digit YoY growth will take time due to past ramp-downs. We anticipate growth in refinance business, but it's uncertain. Meanwhile, sequential growth in that area looks promising from new deal wins."

Question 3

Sandeep Shah: "On Travel and Logistics margins turning negative, will they return to previous levels soon?"

Aravind Viswanathan: "Yes, we made specific investments leading to this margin dip, but expect a significant recovery in Q3 as the investment was a one-time nature, aligning with incoming deal wins."

Question 4

Manik Taneja: "Regarding short-term discretionary projects in Banking, are you seeing further acceleration?"

Nitin Rakesh: "Yes, we've seen increased demand for AI-related spending among clients. The outlook remains strong as transformation needs drive client decisions, aligning with our growth strategies."

Question 5

Dipesh Mehta: "Will the adoption of the new AI platform lead to more multi-tower deals?"

Nitin Rakesh: "Absolutely. The NeoIPâ„¢ platform enhances our competitiveness, principles guiding multi-task deals across various services. Client buy-in might take time, but we see encouraging early adoption."