Why Is Mphasis Focusing on AI-Led Transformation After Strong Q2 Performance?
Mphasis delivered one of its best quarters in recent years, with strong topline growth, stable margins, and record deal wins. The company’s growing focus on AI and digital transformation positions it for sustained momentum in FY26 and beyond.
Financial and Operational Highlights
| Metric | Q2 FY26 | YoY Change | QoQ Change |
|---|---|---|---|
| Revenue | US$445 Mn | ↑ 6% | ↑ 2% |
| EBIT Margin | 15.3% | Stable | Stable |
| EPS | ₹24.7 | ↑ 10.2% | ↑ 4% |
| Direct Business Share | 97.5% | ↑ 7.9% | ↑ 2.2% |
The company sustained double-digit growth across key verticals, despite macro uncertainties. BFSI and Insurance segments contributed most to the topline.
Deal Wins and Pipeline Highlights
- TCV Wins in Q2: $528 Mn; H1 TCV: $1.3 Bn (already above full FY25 levels).
- 12-month executable TCV exceeds $2 Bn, with 6 large deals signed (1 above $100 Mn).
- AI-driven deals form 69% of pipeline, reflecting accelerating enterprise adoption.
- Record deal pipeline: +9% QoQ and +97% YoY.
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SWOT Analysis of Mphasis
| Strengths | Weaknesses |
|---|---|
| Robust AI-driven order book and strong BFSI client relationships. | High exposure to North American BFSI sector limits diversification. |
| Opportunities | Threats |
| Growing AI demand and cost optimization in enterprise digitalization. | Intensifying competition and client spending slowdown risk. |
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Peer Comparison
| Company | Revenue Growth (YoY) | EBIT Margin | P/E (x) |
|---|---|---|---|
| Mphasis | 6% | 15.3% | 24x |
| TCS | 8% | 24% | 29x |
| Coforge | 7% | 14% | 26x |
Investment View by Indian-Share-Tips.com
Mphasis remains well-positioned for long-term growth driven by AI and automation-led transformation. Despite near-term macro uncertainties, robust deal momentum and margin discipline make it a steady compounder. Investors can consider accumulation on declines for a long-term horizon. Short-term traders should book profits on rallies.
Investor Takeaway
Mphasis continues to demonstrate operational excellence and innovation-led growth. The company’s emphasis on AI-driven projects aligns with global enterprise spending patterns, ensuring sustained momentum in coming quarters.
For more detailed insights, visit Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on IT Stocks
- Why Is Mphasis Focusing on AI-Driven Business Transformation?
- How Does Mphasis Compare to TCS and Coforge in Profitability?
- What Are the Key Growth Drivers for Indian IT Midcaps in FY26?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
