Mphasis reported strong Q2 FY26 results, driven by its AI-first digital strategy. The company secured $528 million in TCV for the second consecutive quarter, surpassing full-year FY25 TCV wins in the first half of FY26. Revenue reached $445 million, up 6% YoY in constant currency. Mphasis launched NeoIPTM, a new AI platform, and sees significant growth in its pipeline and deal wins. The company maintains a stable EBIT margin and expects continued growth greater than 2x industry growth.
Financial Highlights
Mphasis announced a strong Q2 FY26, demonstrating continued business performance. Key highlights include:
- Revenue: $445 million, up 2% sequentially and 6% YoY in constant currency, the highest quarterly revenue recorded.
- Direct business contribution: 97.5% of overall revenue.
- EBIT margin: Stable at 15.3%.
- EPS: Grew 10.2% YoY to INR 24.7.
- Operating cash flow generation: $54 million for the quarter.
TCV and Pipeline Growth
The company reported strong TCV wins:
- $528 million in TCV for the quarter, marking the second consecutive quarter above $0.5 billion.
- First half FY26 TCV wins exceeded full-year FY25 TCV wins.
- Last 12 months TCV reached over $2 billion.
Pipeline growth was also notable:
- Pipeline grew 9% sequentially and 97% YoY, with 69% being AI-led.
- BFS pipeline up 45% YoY, non-BFS pipeline up 139% YoY.
- Large deals pipeline up 180% YoY.
Strategic Initiatives and AI Platform
Mphasis launched NeoIPTM, a new AI platform designed for continuous enterprise transformation. This platform integrates multiple Mphasis.ai solutions and focuses on intelligent orchestration. Key capabilities are delivered via specialized AI agents and frameworks within categories like Modernization, Application Development, IT Ops, and Business Ops.
Vertical Performance
Growth momentum was driven by key verticals:
- BFS grew 13.8% YoY. Direct BFS grew 17.3% YoY, driven by wallet share gains and new account wins.
- Insurance and TMT verticals both registered YoY growth of over 25%.
- Insurance vertical for direct grew 4.5% sequentially and 32% YoY in constant currency terms.
- TMT grew 10% sequentially and 26.7% YoY in constant currency terms in direct.
Outlook
Mphasis will continue focusing on winning and executing at the account level, scaling its AI-led propositions, and expanding its footprint in the NeoIPTM suite. The company expects growth to be greater than 2x of industry growth, maintaining an operating EBIT margin in the stated band of 14.75% to 15.75%.
Source: BSE
