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Informist, Friday, Jul. 25, 2025

By Narayana Krishna and Akash Mandal

HYDERABAD/MUMBAI - Information technology and software consulting services company Mphasis Ltd. expects to see robust growth at twice the pace of the industry in 2025-26 (Apr-Mar), led by large deals and steady conversion of deals to revenue, the company's management said in a post-earnings conference call on Friday.

The Bengaluru-based company projected its operating margin within a band of 14.75% and 15.75% led by better utilisation, the management said. For the June quarter, the company reported an operating margin of 15.3%.

The company's consolidated net profit fell over 1% sequentially to INR 4.42 billion in the June quarter, lower than the INR 4.59 billion expected by analysts. Its revenue rose 0.6% on quarter to INR 37.32 billion, but missed the estimate of INR 37.57 billion. Compared to the year-ago period, both the bottom line and top line rose more than 9%.

Mphasis' management said the positive outlook on the company's growth was based its performance in the June quarter, mainly the robust deal pipeline.  

Mphasis' management said that going forward, the utiliastion of manpower would be elevated compared to the average of the last three years. However, investments in new areas such as artificial intelligence might change the dynamics. Utilisation is not a control metric for the company, Mphasis said.

Despite challenges due to macro-level uncertainty globally, the company is confident of securing more deals in the coming quarter. For the June quarter, Mphasis secured four large deals, of which three were more than $100 million in size. Artificial intelligence-led deals were 68% of the total deal pipeline as on Jun. 30. The large deal pipeline was up 40% quarter-on-quarter and 154% on year, giving a clear visibility for growth, the company said. It said conversion of deals into revenue is likely to take one-two quarters, while clients are focused on cost and efficiency. While overall deal wins are seen robust in the coming quarters, it expects clear deal visibility in the logistics division, the third-largest business segment for the company.

The order pipeline in the banking and financial services segment grew 47% on year and that in the non-BFS operations rose 108%. The company said it won total new contracts worth $760 million during the June quarter, much higher than the $400 million-$600 million broking firms had estimated. Mphasis' management said that despite macroeconomic uncertainties, it doesn't expect any risk from any part of the business.

At 1000 IST, shares of Mphasis were at INR 2,735.10 on the National Stock Exchange, up 3.2% from the previous close.  End

US$1 = INR 86.49

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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