Synopsis: Bengaluru-based IT services company has turned the corner on revenue growth after a string of strong deal wins, and one brokerage sees the momentum only building from here, setting a target that implies significant upside for investors.
After months of booking deals, one of India’s mid-cap IT companies has begun converting that pipeline into actual revenue. A leading brokerage has retained its bullish stance on the stock, pointing to artificial intelligence-led demand and a record deal pipeline as the two biggest tailwinds heading into the next fiscal year.
From Deal Wins to Real Revenues
Mphasis Ltd. has been on a strong deal-winning run for three consecutive quarters, but the critical question for investors was always whether those wins would translate into actual revenue. In Q4 FY26, that answer came through. The company posted solid growth both on a sequential and year-on-year basis, signalling that the earlier pipeline is finally flowing into the top line.
Nuvama, in its brokerage report, noted that a strong exit rate in FY26 combined with record deal wins sets the stage for an accelerated performance in FY27. The brokerage has retained a Buy rating on the stock with a target price of ₹3,200, implying an upside of around 42% from current levels.
BFSI and AI: The Two Engines Firing
The primary growth engine continues to be the Banking, Financial Services and Insurance segment, which remains Mphasis’ largest revenue contributor. The banking and insurance verticals within this segment have both shown consistent momentum, supported by stronger client execution and rising technology spending by financial institutions.
Alongside BFSI, artificial intelligence-led transformation is increasingly driving deal flow. Nuvama highlighted that AI adoption among enterprise clients has moved well beyond pilot projects and is now being deployed at scale across organisations. The brokerage noted that approximately 69% of the current deal pipeline is AI-led – a figure that also applied to Q4 deal wins of $407 million.
Not every vertical, however, is firing on all cylinders. The Technology, Media and Telecom segment saw some near-term softness due to project completions and slower client decision-making. Management has acknowledged this as a temporary headwind rather than a structural concern.
Margins Hold as Estimates Get a Bump
On the profitability front, Mphasis has managed to keep margins steady despite ongoing investments in growth. EBIT margins expanded by 20 basis points sequentially to 15.4% in Q4, while full-year FY26 margins came in at 15.3% – broadly flat on a year-on-year basis. This stability is notable given that the company has been scaling up its AI capabilities and workforce simultaneously.
Nuvama has revised its earnings estimates upward for FY27 and FY28, factoring in both the revised USD-INR assumption and the improved business trajectory. EPS estimates for the two years have been nudged up by approximately 2.9% and 3.4% respectively. The revised target of ₹3,200 reflects this improved outlook.
Financial Highlights
Mphasis Ltd demonstrated resilient growth in the quarter ended March 2026. Revenue reached ₹4,243 crore, a 14.36% YoY increase from ₹3,710 crore in March 2025, supported by a 6% QoQ rise from December 2025. Net Profit grew 14.35% YoY to ₹510 crore, while the Operating Profit Margin (OPM) remained steady at 19%.
For the full year FY 2026, the company reported a total revenue of ₹15,880 crore, reflecting an 11.60% annual growth over ₹14,230 crore in FY 2025. Long-term performance remains consistent with a 3-year Sales CAGR of 5% and a 3-year Profit CAGR of 5%. Despite broader IT sector headwinds, Mphasis has maintained its profitability, supported by a healthy dividend payout of 64%.
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