Mphasis reported revenue of 1% CC QoQ (in-line), while INR revenue grew 0.6% QoQ. Growth was led by Direct biz (98% of rev.), which grew 1.1% QoQ in constant currency terms. Operating profit margin was flat at 15.3% (our estimate: 15.4%).
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Dolat Capital Report
We believe Mphasis Ltd. is well-positioned to remain on a healthy growth trajectory, driven by strong signs of pick-up in BFS (incl mortgage) and recovery in the non-BFS segment as well. Total contract value wins, and the pipeline remains healthy.
However, we take cognizance of the weakened macro environment due to tariff disruption and expect delays in client decision-making and re-thinking of budgets, which may push out growth rates.
Relative to peers, valuations are reasonable and supported by strong execution and commentary. Noting the recent run-up, we revise our rating to ‘Accumulate' with target price of Rs 3,100 at ~28x FY27E earnings of Rs 110.8.
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