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Informist, Monday, Apr. 27, 2026

By Shakshi Jain

NEW DELHI – Information technology services company Mphasis Ltd. is expected to post a moderate sequential rise in its consolidated revenue and adjusted net profit for the March quarter, helped by a healthy conversion of orders into revenue, deal ramp-ups, and improvement in the banking and financial services segment, according to analysts. The company's earnings before interest and tax margin, or EBIT margin, is expected to remain largely stable compared to the trailing quarter, with foreign exchange losses, costs tied to ramp-up of large deals, and sustained investments seen offsetting the gains from operating efficiencies and the depreciation of the rupee against the dollar.

If the mid-cap IT player's results are in line with analysts' consensus estimates, the bottom line will revert to growth after declining in the trailing quarter, while revenue growth would be the highest in 11 quarters. 

The Bengaluru-based company is expected to report an over 5% sequential growth and a near 13% on-year rise in its adjusted net profit for the March quarter on a consolidated basis at INR 5.03 billion, according to the average of estimates from 16 brokerages. Including the impact of a one-time cost of INR 354.77 million reported in the trailing quarter, the sequential net profit growth for Jan-Mar is likely to improve almost 14%.

The net profit estimates for the March quarter range from a high of INR 5.61 billion by Nomura Financial Advisory & Securities (India) Pvt. Ltd. to a low of INR 4.61 billion by HDFC Securities Ltd.

Mphasis' consolidated top line for the reporting quarter is expected to rise almost 6% sequentially and nearly 14% on year to INR 42.28 billion, according to the average of estimates. The highest revenue estimate is INR 42.91 billion by Dolat Capital Market Pvt. Ltd. and the lowest is INR 41.78 billion by Elara Securities (India) Pvt. Ltd.

For the December quarter, the company had reported a consolidated net profit of INR 4.42 billion on revenue of INR 40.03 billion. Excluding the one-time cost incurred due to implementation of the new labour codes, the company's adjusted bottom line for the quarter would have been about INR 4.78 billion, the change in tax notwithstanding. In the year-ago March quarter, Mphasis had registered a consolidated net profit of INR 4.46 billion on revenue of INR 37.10 billion.

Nomura attributed the expected revenue growth for the March quarter to the ramp-up of recently won projects and improvement in the banking and financial services segment. ICICI Securities said growth in the BFS segment likely continued in the March quarter, while revenues from the logistics and transportation, and technology verticals are expected to be stable. So far, the brokerage does not expect a slowdown in the company's revenues from the airlines industry despite the war in West Asia. Overall, the company has a negligible exposure to West Asia, it said.

In dollar terms, the company's revenue is estimated at $462.67 million, according to the average of estimates from 13 brokerages. This is slightly higher than the $451.4 million reported in the December quarter.

Emkay Global Financial Services Ltd. anticipates a 10-basis-point cross-currency impact on revenue for the quarter. The rupee depreciated 6% during the three-month period to INR 94.83 per dollar as of Mar. 31.

In constant currency terms, Mphasis is likely to report 1.9-3.0% revenue growth for the March quarter, as per the estimates from nine brokerages. The company had recorded 1.5% sequential growth on the metric in the trailing quarter.

Most brokerages expect the company to report deal wins in the $300 million-$400 million range for the March quarter, taking the total contract value for the full year to over $2 billion. Mphasis had bagged deals worth $428 million in the December quarter, $528 million in the September quarter, and $760 million in the June quarter. 

MARGIN, COMMENTARY

The IT player's EBIT margin is expected to expand 10 bps sequentially to 15.3% for the March quarter, according to the average of estimates from 12 brokerages. This would be within the 14.75-15.75% EBIT margin guidance for 2025-26 (Apr-Mar). Centrum Broking Ltd. expects the company to maintain the same EBIT margin guidance for FY27.

For FY26, the company's adjusted bottom line is expected to rise over 10% on year to INR 18.79 billion, as per the average of estimates from four brokerages. Its consolidated revenue for the year is likely to grow over 11% to INR 158.42 billion.

Mphasis will announce its March-quarter earnings on Wednesday. Investors will watch out for management commentary on demand trends across verticals, technology budgets of clients for calendar year 2026, changing pricing models and deflationary impact of artificial intelligence, and the second-order effects of the West Asia war. Market participants also await commentary on the potential impact on the company's mortgage business if inflation rises in developed markets due to the war.

"We will look out for Generative AI-related commentary as Mphasis has been at the forefront of AI and had said that 69% of the pipeline is now led by Gen AI," Nirmal Bang Equities said.

On Monday, shares of Mphasis ended over 4% higher at INR 2,264.90 on the National Stock Exchange. The stock is down over 19% since the company reported its December quarter earnings. The stock is down more than 25% from its 52-week high of INR 3,037.2, recorded on Sept. 18.

Among the 15 research recommendations on Mphasis available with Informist, 12 have a "buy" recommendation on the stock, while three have a "hold" recommendation. The average target price of the "buy" calls is INR 3,290. This is more than 45% higher than Monday's closing price.

Following are the Jan-Mar earnings estimates for Mphasis from 16 brokerages in descending order of the estimate of net profit in INR billion:

End

US$1 = INR 94.19

Edited by Tanima Banerjee

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