Mphasis (MPHL IN) – Analyst Meet Update – Transitioning from Services to Platform – BUY
Published on 28 May 2026
We attended MPHL investor day, the company is shifting its operating model from traditional services to a combination of subscription/ARR +implementation + managed service model. The new operating model revenue mix is in low-single-digit that it aims to scale to 20-30% in the medium term. With those efforts, the company launched Mphasis Tria, its new enterprise AI platform to capture institutional memories and derive ontologies on top, progressively shifting from bespoke service efforts to recurring service model. The platform-led service approach would help drive business accountability, owning decisions and enterprise AI governance, in a way de-risking the business outcomes and scale AI transition. On business momentum, the company highlighted strong deal traction with pipeline growing 4x over 18 months, the large deal (USD100m+) concentration mix has improved notably to 29% in FY26 vs 18% in FY25. With this change in mix, the average deal size has also improved to USD75m in FY26 from USD54m in FY25. MPHL is doubling down on consolidation deals and gaining wallet share on blue-chip accounts. Although the constructs of these deals are growth and margin supportive, but it is backed by upfront capital allocations, and measured risk that is tied to scaling presumptions. We might have a down-side risk to our cash conversion (FY27E/FY28E), if a similar deal construct were to escalate going forward. We maintain our revenue and margin estimates for FY27E & FY28E. Reiterate our BUY rating with an unchanged TP of INR 3,000.
