Mphasis Q4 Results Review: Dolat Capital Cautiously Optimistic Amid Macro Headwinds; Maintains 'Buy'

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Dolat Capital Report

Mphasis Ltd. reported revenue of 2.9% constant currency QoQ (our estimate: +2.8%), while INR revenue grew 4.2% QoQ. Growth was led by Direct biz (98% of rev.), which grew 5.4% QoQ in CC terms. Operating profit margin was flat at 15.3% (our estimate: 14.9%).

Robust deal wins continued ($390 million, +11% QoQ), while commentary on pipeline across segments was benign (BFS/Non-BFS) up 70%/99% YoY. Although Mphasis is positive on delivering better growth in FY26, macro headwinds pose a challenge, with clients and their spends navigating an uncertain environment. OPM band guided in the range of 14.75% - 15.75%.

We lower our FY26E/FY27E earnings by 2.9%/3.9%, due to the prevailing uncertainties in the macro environment. Despite these challenges, Mphasis has demonstrated consistent execution and is well placed to ride on revival in BFS while enhancing its non-BFS portfolio. Given reasonable valuations, we maintain our ‘Buy’ rating with target price of Rs. 3,130 (valuing at 28x FY27E).

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