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HomeMarket NewsMphasis shares jump 4% after Co says Q2 will see best sequential growth in three years
Mphasis also said its deal pipeline reached a record level, growing 8% sequentially and 28% year-on-year, with both a healthy backlog and shorter-duration deals expected to support future revenue growth.
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Mphasis shares will be in focus on Friday, July 24, after the IT services company reported June quarter results that exceeded revenue expectations but fell short on margins, while reiterating its FY27 growth and profitability guidance.
The company reported 2.1% quarter-on-quarter constant currency (CC) revenue growth, ahead of Street estimates. However, EBIT margin declined 60 basis points sequentially to 14.8% from 15.4% in the previous quarter.
Despite the margin pressure, Mphasis expects growth momentum to accelerate in the September quarter, forecasting its strongest sequential constant currency revenue growth in the past three years.
The company reiterated its FY27 guidance, expecting revenue growth in the high single-digit to low double-digit range while maintaining its EBIT margin guidance of 14.75%-15.75%. It also continues to target operating cash flow conversion of around 80% of net income.
Deal wins remained strong during the quarter, with total contract value (TCV) of new deals rising to $461 million, compared with $407 million in the previous quarter. The company signed three large deals during Q1, including one worth over $100 million, taking its trailing 12-month TCV above $1.8 billion.
Mphasis also said its deal pipeline reached a record level, growing 8% sequentially and 28% year-on-year, with both a healthy backlog and shorter-duration deals expected to support future revenue growth.
JPMorgan retained its 'Overweight' rating on the stock with a target price of ₹2,600. The brokerage noted that while Q1 revenue exceeded expectations and deal wins remained healthy for the third consecutive quarter, margins were below estimates.
It also highlighted management's guidance for stronger Q2 growth and the decision to maintain FY27 revenue and margin guidance.
Mphasis concall
Mphasis said it expects Q2FY27 to deliver its best sequential constant currency (CC) revenue growth in the last three years. The company added that it entered the quarter with the highest pipeline in its history and is witnessing the strongest short-cycle deal activity in several quarters.
The company maintained its FY27 guidance, reiterating its expectation of high single-digit to low double-digit constant currency revenue growth. It also retained its EBIT margin guidance of 14.75%-15.75% and said operating cash flow conversion is expected to remain at 80% of net income through FY27.
Mphasis further said its AI-led initiatives continue to gain traction, with the pipeline growing 2.8 times since the launch of Mphasis AI.
First Published:
Jul 24, 2026 7:48 AM
IST
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