Mphasis Limited – FY26 Financial Results & Strategic Update

Date: 29 April 2026

Key Financial Highlights

• Revenue: ₹158,796 mn (Consolidated) – up 11.6% YoY (6.7% in constant currency).
• Profit after tax: ₹18,626 mn; EPS (basic): ₹97.8.
• Operating margin: 15.3% (flat YoY); Net margin (pre‑exceptional): 11.9% (down 10 bps).
• Quarter Q4 FY26: Revenue ₹42,427 mn (+14.4% YoY, +6.0% QoQ); EPS ₹26.7 (basic) – up 13.7% YoY.
• Dividend: Final dividend of ₹62 per share proposed (subject to AGM approval).
• Exceptional item: ₹355 mn impact from new labour codes (one‑time).

Strategic Developments

• CEO Re‑appointment: Nitin Rakesh confirmed as CEO & MD for a further 5 years (effective 1 Oct 2026).
• Acquisitions & Investments:
  • EDZ Systems (cyber‑security) – ₹1,424 mn consideration (contingent ₹558 mn).
  • tSgS Inc (software testing) – ₹2,308 mn consideration (contingent ₹1,241 mn).
  • Ackoah Inc – 26% stake for ₹355 mn; associate loss of ₹52 mn recorded.
  • Locate Software Inc – acquisition for ₹755 mn (contingent ₹559 mn).
  • Theory & Practice (TAP) – AI decision‑intelligence platform, cash consideration up to ₹2,033 mn (contingent ₹1,355 mn).
  • OKIN Process contracts – consideration up to ₹522 mn (contingent ₹142 mn).
• New Wins: FY26 TCV of USD 2.1 bn (60% AI‑led); Q4 FY26 TCV of USD 407 mn (64% AI‑led).
• Operating Segments: Strong growth in Banking & Financial Services, Insurance, and Technology Media & Telecom.

Regulatory / Compliance

• Labour Code Changes: One‑time exceptional charge of ₹355 mn recorded for impact of new labour codes; company continues to monitor further implications.
• SEBI Compliance: Audited results approved; auditors issued unmodified opinion.

Cash Flow & Balance Sheet

• Cash & cash equivalents: ₹11,229 mn at FY end (up from ₹9,863 mn).
• Total assets: ₹177,819 mn; Equity: ₹107,437 mn.
• Financing activities: Net cash outflow of ₹10.8 bn, mainly due to borrowings repayment and dividend payout.

Investor Implications

• Opportunities: AI‑led service growth, expanding capabilities via acquisitions, robust order book, attractive dividend.
• Risks: Integration of multiple recent acquisitions, contingent consideration payments, potential further regulatory cost from labour reforms, cash outflow for dividend and acquisitions.

Outlook

Mphasis is positioned for continued revenue expansion in FY27, leveraging AI‑driven offerings and a growing pipeline. Margin stability and a strong balance sheet support the proposed dividend and future investments. Investors should watch integration progress of recent deals and any additional regulatory cost pressures.