Mphasis (MPHL IN) – Q4FY26 Result Update – Steady execution with strong deal momentum – BUY

MPHL reported a largely in-line Q4FY26 performance, with revenue growth of 2.5% QoQ (CC) driven by ramp-up of deal wins in BFS and Insurance, partly offset by weakness in the TMT segment. For FY26, revenue grew 6.7% YoY in CC (~6.9% reported), while growth excluding the Logistics segment (impacted by client-specific restructuring) remained strong at ~15.5%, reflecting healthy underlying momentum. Growth was driven by momentum in BFS and Insurance, supported by strong traction in top accounts and rising demand for platform-led, AI-driven transformation, underpinned by sustained investments in IP (NeoIP), AI capabilities, and large deal conversion. Deal momentum remained strong with FY26 net new TCV at US$2.1bn (+68% YoY), with a significant share of AI-led deals and a pipeline that is now ~69% AI-driven, providing strong visibility. Against this backdrop, management has guided for high single-digit to low double-digit revenue growth in FY27, supported by continued strength in BFS and Insurance and a gradual recovery in the Logistics segment; we maintain our revenue growth estimates at ~9%/10.7% YoY CC for FY27E/FY28E, respectively While operating leverage from platform-led delivery remains a tailwind, incremental investments in AI platforms, GTM, and leadership could moderate margin expansion, and hence we trim FY28E margin estimates marginally by ~10bps. Overall, we expect a USD revenue CAGR of ~9.7% and INR earnings CAGR of ~15% over FY26–28E, and value MPHL at 23x FY28E EPS to arrive at a target price of INR 3,000, maintaining our BUY rating.