More Stories

Informist, Thursday, Jul. 24, 2025

 

By Arya S. Biju

 

MUMBAI - Continued growth in the banking and financial services and technology, media, and telecommunications verticals along with ramp-up of deals are expected to drive Mphasis Ltd.'s top line for the June quarter. However, the growth in revenue is expected to be partially offset by a weak logistics and transportation vertical and winding down of other business. 

 

The information technology services and consulting company is expected to report a low single-digit sequential rise in both top line and bottom line, with its top line growing at its slowest pace in two quarters. However, analysts are divided about the company's margin for the quarter. While some expect margins to improve sequentially, others estimate them to fall and a few see them remaining flat. 

 

The information technology services provider's consolidated net profit for the latest quarter is expected to rise around 3% on quarter and 14% on year to INR 4.59 billion, according to the average of estimates from 15 brokerages. Its consolidated revenue for the quarter is expected to rise over 1% sequentially and nearly 10% on year to INR 37.57 billion. 

 

HDFC Securities Ltd. has the highest estimate for the company's net profit at INR 5.69 billion and HSBC Global Research has the lowest estimate of INR 4.26 billion. Nirmal Bang Equities Pvt. Ltd. has the highest estimate for net sales at INR 38.55 billion and Indsec Securities and Finance Ltd. has the lowest estimate of INR 37.00 billion. 

 

In dollar terms, the company is expected to report a revenue of $434.7 million, up from $430 million reported in the previous quarter and $410 million reported in the year-ago quarter. In constant currency terms, its revenue for the latest quarter is expected to grow 1.0-1.8%, estimates from eight brokerages showed. 

 

For the reporting quarter, revenue from the company's largest segment, banking and financial services, is expected to grow 4.4% on quarter, brokerage Anand Rathi Share and Stock Brokers Ltd. said in an earnings preview. During the previous quarter, revenue from this segment rose nearly 6% on quarter and around 12% on year to $215 million. Revenue from this segment contributed to around 50% of the company's total sales in the previous quarter. "Mphasis stands out as a key beneficiary of the BFSI (banking, financial services and insurance) recovery, supported by rising tech demand from large US banks and consistent momentum in banking and capital markets across global IT peers," Anand Rathi said.

 

Revenue from the technology, media, and telecommunications vertical, which contributed around 18% to the company's total sales in the March quarter, is also expected to improve during the latest quarter, analysts said. However, revenue from the logistics and transportation segment is expected to remain weak due to absence of new deals to make up for completed projects, ICICI Securities said. During the previous quarter, revenue from the logistics and transportation vertical fell nearly 8% on quarter and around 16% on year to $47 million, impacted by macro-economic uncertainties. Meanwhile, the company sees significant opportunities in the deal pipeline for logistics and transportation, the management had said in post-earnings call with analysts in April. 

 

Analysts are divided on how the company will fare in terms of operating margin for the latest quarter. Dolat Capital, Elara Securities, Emkay Global, Kotak Institutional Equities, Nimal Bang, and Prabhudas Lilladher Pvt. Ltd. expect the operating margin, or the earnings before interest and tax margin, to improve around 10% sequentially supported by growth in its top line. 

 

On the other hand, HSBC Global Research and ICICI Securities expect the company's EBIT margin to contract on a sequential basis. HSBC expects the margin to decline 30 basis points on quarter driven by higher expenditure on deal ramp-ups and investment in talent. Brokerages Indsec Securities and Nuvama Wealth Management Ltd. expect the company's margin to remain flat on quarter. 

 

Motilal Oswal Financial Services Ltd., expects the company's margin for the June quarter to be "range-bound, with utilisation expected to hold steady and no material change in amortisation or SG&A (selling, general, and administrative expenses) ratios." During the previous quarter, the company guided for an EBIT margin of 14.75-15.75% for 2025-26 (Apr-Mar). 

 

The company's total contract value of deals during the reporting quarter is expected to be $400 million-$600 million, estimates from three brokerages showed. This will be higher than the $390 million total deal contract value reported in the previous quarter and $319 million reported in the year-ago quarter. The company is also expected to report an improvement in its deal closures during the quarter despite the continued macro-economic uncertainties over US tariffs. 

 

The company will announce its June quarter earnings on Thursday. Investors will watch out for management commentary on order booking, deal pipeline, and pace of deal closure. Commentary on demand trends across verticals especially in the logistics and transportation vertical and outlook for growth in these verticals will be monitored.

 

Further updates on business with its third-largest client, FedEx Corp., will be monitored after the company in June clarified that it continues to be a service provider in the FedEx ecosystem. The clarification came after news reports said that the company has lost its business with FedEx. Management commentary on the impact of adoption of generative-artificial intelligence on volume of work and pricing will also be monitored, analysts said. 

 

At 0946 IST, shares of Mphasis traded 1.5% lower at INR 2,694.60 on the National Stock Exchange. The stock has risen over 6% since the company announced its March quarter earnings on Apr. 25, but was down over 26% from its all-time high of INR 3,659.75 hit on Oct. 19, 2021.

 

Of the 17 brokerage reports on the stock available with Informist, 10 have a "buy" or equivalent rating with an average target price of INR 3,055. Of the remaining seven, five have a "hold" or equivalent rating on the stock and two have a "sell" or equivalent rating. 

 

Following are the June quarter earnings estimates for Mphasis, in INR million, based on reports from 15 brokerages in descending order of net profit:

 

Brokerage	Net Sales	Net Profit	EBITDA	Revenue (mln $)	?IT margin
HDFC Securities Ltd	37,540.00	5,690.00		439	15.2
Prabhudas Lilladher Pvt Ltd	37,500.00	4,600.00		439	15.4
Nuvama Wealth Management Ltd	37,662.00	4,596.10	7,041.00	441	15.3
Anand Rathi Share and Stock Brokers Ltd	37,401.00	4,585.00	7,195.00		15.4
Elara Securities (India) Pvt Ltd	37,408.00	4,585.00		435
Antique Stock Broking Ltd	37,659.00	4,562.00	6,969.00
Motilal Oswal Financial Services Ltd	37,607.00	4,545.00	7,070.00
Kotak Institutional Equities	37,616.00	4,541.00	6,997.00	439	15.4
JM Financial Institutional Securities Pvt Ltd	37,709.00	4,539.00	7,218.00
Dolat Capital Market Pvt Ltd	37,405.00	4,538.00
ICICI Securities Ltd	37,504.00	4,513.00		439	15.5
Indsec Securities and Finance Ltd	37,000.00	4,500.00		400	15.3
Nirmal Bang Equities Pvt Ltd	38,547.00	4,437.00		441	15.5
Emkay Global Financial Services Ltd	37,428.00	4,414.00	6,999.00
HSBC Global Research	37,509.00	4,259.00		439	15
Average	37566.33	4593.61	7069.86	434.67

 

End

US$1 = INR 86.28

 

Edited by Vandana Hingorani

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.