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Informist, Tuesday, Jul. 21, 2026

 

By Shakshi Jain

 

NEW DELHI – Mphasis Ltd. is expected to report a moderate sequential rise in its consolidated net profit and revenues for the June quarter on the back of execution of a healthy order book, ramp-up of large deals, and some inorganic contribution from the recently acquired Theory and Practice Business Intelligence Inc., according to analysts. Strong traction in banking and financial services, and insurance segments is likely to have continued in the reporting quarter, alongside some weakness in the logistics and transportation vertical due to the secondary impact of the war in West Asia, brokerages said. They expect revenues from the technology, media, and telecom segment to stay stable for the quarter.

 

The information technology consulting and applied services provider's consolidated net profit for the June quarter is expected to rise 4% sequentially and 20% on year to INR 5.3 billion, according to the average of estimates from 18 brokerages. The highest bottom line estimate is INR 5.5 billion from Nomura Financial Advisory and Securities (India) Pvt. Ltd. and the lowest is INR 5 billion from Equirus Securities Pvt. Ltd.

 

Mphasis' consolidated revenue for the reporting quarter is expected to rise over 4% sequentially and almost 19% on year to INR 44.29 billion, as per the average of estimates. The highest top line estimate is INR 44.88 billion from Bank of America Global Research and the lowest is INR 43.62 billion from Nirmal Bang Equities Pvt. Ltd.

 

Mphasis had reported a consolidated net profit of INR 5.10 billion for the March quarter on revenues of INR 42.43 billion.

 

In constant currency terms, revenues of the company are expected to grow between 1.3% and 2.7% for the June quarter, according to estimates from 11 brokerages. In dollar terms, revenues are expected to grow slightly to $468.08 million for the reporting quarter from $462.6 million in the March quarter, according to the average of 15 estimates. JM Financial Services Institutional Securities Pvt. Ltd. estimates a (-)20 basis points cross-currency impact on revenues in dollar terms and Emkay Global Financial Services Ltd. pegs a (-)10 bps pressure.

 

The highest estimate for new deal wins in the quarter is $300 million to $350 million from Nomura and the lowest is $500 million from JM Financial. "We expect TCV (total contract value) to remain above the US$400mn mark (as it has done in the past 4 quarters) as it has cracked the large deal engine and has been able to consistently deliver strong TCV wins," Nirmal Bang said. 

 

If analysts' consensus estimates for the June quarter hold, Mphasis' bottom line will rise sequentially for a second consecutive quarter and the top line will grow for the 12th quarter in a row. Both metrics will, however, grow slower than in the March quarter.

 

STABLE MARGIN

Mphasis' earnings before interest and tax margin is estimated at 15.5% for the June quarter, according to the average of 15 estimates. This would be within the company's target range of 14.75-15.75% for the ongoing financial year. Mphasis had reported an operating margin of 15.4% for the March quarter.

 

Analysts said operating leverage on the back of revenue growth will help expand margins for the quarter but artificial intelligence-related investments, and sales and marketing costs will limit that expansion. "Savings-led AI transformation theme will help maintain margins," Nirmal Bang said.

 

Nuvama and Emkay Global expect the company to maintain its revenue growth guidance of high single-digit to low double-digit as well as the operating margin target for the year.

 

Mphasis will announce its June quarter earnings Thursday. Market participants will watch out for management commentary on demand trends across verticals, outlook for the company's mortgage and Digital Customer Experience businesses, deflationary impact of AI, and the second-order effects of the West Asia war. Investors also await commentary on the pace of deal closures, pipeline conversion, and deal-to-revenue conversion. They would also want to know if the company anticipates any client-specific issues, especially in large accounts. 

 

Tuesday, shares of Mphasis closed at INR 2,380.10 apiece on the National Stock Exchange, down 1.4% from Friday. The stock is up over 3% since the company reported its March-quarter earnings. The stock is down 22% from its 52-week high of INR 3,037.2, recorded on Sept. 18.

 

Of the 15 research recommendations on Mphasis available with Informist, 14 have a "buy" or an equivalent recommendation on the stock and one has a "hold" recommendation. The average target price of the "buy" calls is INR 2,862 per share, which is more than 20% higher than the current market price.

 

Following are the Apr-Jun earnings estimates for Mphasis from 18 brokerages, in descending order of the estimate of net profit, in INR billion:

 

Brokerage	Net Sales	Net Profit	Revenue ($ mln)	EBIT (%)
Nomura Equity Research	44.30	5.50	471	15.5
ICICI Securities Ltd.	44.63	5.43	470	16.3
Motilal Oswal Financial Services Ltd.	44.00	5.41	471	15.5
Anand Rathi Share and Stock Brokers Ltd.	44.38	5.41	469	16.9
Prabhudas Lilladher Pvt. Ltd.	43.70	5.40	468.2	15.3
PhillipCapital (India) Pvt. Ltd.	44.20	5.37	472	15.3
JM Financial Institutional Securities Pvt. Ltd.	44.68	5.35	472	15.3
Dolat Capital Market Pvt. Ltd.	44.80	5.32	473	15.4
HDFC Securities Ltd.	44.72	5.30	472	15.5
Indsec Securities and Finance Ltd.	44.00	5.30	463	15.3
Elara Securities (India) Pvt. Ltd.	43.68	5.30	437
Kotak Securities Ltd.	44.76	5.26	472	15.2
Emkay Global Financial Services Ltd.	44.17	5.24
Bank of America global research	44.88	5.24
Centrum Broking Ltd.	44.41	5.23		15.2
Nirmal Bang Equities Pvt. Ltd.	43.62	5.18	474	15.4
Nuvama Wealth Management Ltd.	43.93	5.16	464	15.3
Equirus Securities Pvt. Ltd.	44.05	4.99	473	15.3
Average	44.27	5.30	468.08	15.51

 

End

 

US$1 = INR 96.23

 

Edited by Shubhayan Bhattacharya

 

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