Mphasis Q1 FY26 Results: Net Profit Rises 9.2% YoY to ₹4,417 Mn, Records Highest-Ever $760 Mn in Deal Wins

Mumbai, 25 July 2025: Mphasis Limited has reported a strong start to FY26, delivering a 9.2% year-on-year increase in consolidated net profit to ₹4,417.03 million, driven by robust client demand for its AI-led digital transformation services. The Bengaluru-based IT services provider also announced its highest-ever Total Contract Value (TCV) for a single quarter, closing deals worth $760 million, with 68% of them led by AI engagements.

Following the release of its Q1 FY26 results, Mphasis Ltd’s share price rose by ₹104.50, reflecting a 3.94% increase, to trade at ₹2,758.00 as of 9:50 am IST on 25 July. The stock opened at ₹2,621.00, touched an intraday high of ₹2,792.00, and recorded a low of ₹2,620.00 during early trading hours. With a market capitalisation of ₹52,520 crore, the stock is trading at a P/E ratio of 30.86, offering a dividend yield of 2.07%.

Revenue Growth Strengthens on the Back of High-Value AI Deals

For the quarter ended 30 June 2025, consolidated revenue from operations stood at ₹37,324.89 million, reflecting a 9.1% increase year-on-year and 0.6% quarter-on-quarter growth. Total income reached ₹38,134.37 million, registering 1.2% sequential growth. Mphasis also posted an EBITDA of ₹10,777.33 million, up 11% YoY, with a segment result improvement driven by margin discipline and improved delivery mix.

Profit before tax rose to ₹6,100.71 million, showing a 13.5% YoY and 3.2% QoQ rise. Meanwhile, total comprehensive income surged 28.8% year-on-year to ₹5,416.23 million, underscoring healthy cash flows and operational strength. The company’s Basic EPS was ₹23.22, while Diluted EPS stood at ₹23.14, both reflecting over 8% YoY growth.

Segment-Wise Growth Led by BFS, Insurance, and TMT

The Banking and Financial Services (BFS) vertical contributed the largest share of revenue at ₹19,679.28 million, delivering a segment profit of ₹6,308.59 million. The Insurance segment followed with revenue of ₹5,105 million and segment profit of ₹1,783.37 million. The Technology, Media, and Telecom (TMT) vertical recorded revenue of ₹6,757.20 million and a profit of ₹1,304.54 million.

Logistics and Transportation reported revenue of ₹2,170.93 million, but only ₹125.88 million in segment profit, impacted by client-specific investment slowdowns. The ‘Others’ category brought in ₹3,629.02 million in revenue and ₹1,271.49 million in segment result. These numbers indicate steady performance across core verticals, with BFS, Insurance, and TMT showing over 20% YoY growth in direct revenue.

Standalone Business Sees Revenue Dip Despite Profitability

In standalone terms, revenue from operations declined to ₹22,373.71 million from ₹23,181.89 million YoY, while profit before tax came in at ₹4,017.78 million, down from ₹5,476.57 million in Q1 FY25. Profit after tax stood at ₹2,981.83 million, compared to ₹4,146.95 million in the same period last year.

Mphasis Secures $760 Mn in TCV with AI at the Core of Major Deals

During Q1 FY26, Mphasis closed $760 million in Total Contract Value, the highest in any quarter, with AI-led engagements accounting for 68% of total wins. Notable deals included a strategic platform transformation for a North American life insurance company, intelligent cash visibility solutions for a large U.S. financial services client, and a savings-led AI transformation project for an asset servicing firm.

Focus on AI Drives Strategic Outlook and Future Growth Plans

Commenting on the results, Nitin Rakesh, CEO and Managing Director, stated that early investments in AI have enabled Mphasis to deliver at scale and win client trust across critical sectors. The company reported a record 84% YoY increase in deal pipeline growth, reinforcing its strong momentum heading into the rest of FY26.

Mphasis reaffirmed its EBIT margin guidance of 14.75% to 15.75%, aiming for industry-beating growth in the upcoming quarters, supported by accelerated deal conversions and its continued AI-first strategy.

Positioned Above Peers in Key Metrics and Growth

Mphasis’s 9.1% YoY revenue growth and 11% EBITDA increase place it above many mid- and large-cap IT services firms, which typically report single-digit growth in a soft global IT environment. Its record TCV of $760 million and 28.8% YoY rise in total comprehensive income underline a strong balance of innovation and profitability.

Mphasis has demonstrated its growing global competitiveness with strong financials, record contract wins, and expanding AI capabilities. With focused investments in digital platforms and domain-led solutions, the company appears well-prepared to sustain its growth trajectory through FY26 and beyond.

REF:https://nsearchives.nseindia.com/corporate/MPHASIS_24072025235913_EarningsCallDeckIntimation.pdf

https://nsearchives.nseindia.com/corporate/MPHASIS_24072025234856_OutcomeofBoardMeeting24072025.pdf

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations