MPHASIS Q2 FY26 earnings call.
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Revenue
₹3,902 Cr
verified against source
Revenue YoY
6%
reported change
EBITDA
Pending
latest reported figure
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Actual signal trajectory
Where this quarter sits.
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What the record says.
MphasiS delivered a strong Q2 FY26 with highest-ever quarterly revenue and robust deal momentum. $528 million in TCV for the second consecutive quarter drove $1.3 billion H1 TCV wins, exceeding full-year FY25. Revenue grew 6% YoY in CC with Direct BFS up 17.3% YoY and Insurance/TMT each expanding 25%+ YoY. The company launched NeoIP, a unified AI platform with purpose-built agents, and reported pipeline growth of 97% YoY with BFS pipeline up 45% and non-BFS up 139%. Large deals pipeline surged 180% YoY. The management maintained growth guidance of >2x industry and operating margin target of 14.75-15.75%. Key risks include macro uncertainty from regional banking concerns (though management sees no systemic exposure), potential H1B visa-related supply chain cost increases, and margin pressure from rising fixed-price mix increasing DSO to 89 days. Logistics vertical is expected to return to sequential growth from Q3 after one-time investment impact in Q2.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects growth to exceed twice the industry growth rate based on H1 performance and steady conversion of strong TCV wins to revenue with large deal ramp-ups.
- Company will continue to target operating margin within the stated band of 14.75 to 15.75% while making investments for growth.
- The logistics and transportation vertical is expected to start delivering sequential growth from Q3 after experiencing one-time investment impact in Q2.
- The increase in DSO (to 89 days, +5 QoQ) due to fixed price contribution increasing >50% YoY is expected to normalize over the next 3-4 quarters.
Risks flagged
- While management sees no systemic concerns from recent US regional bank incidents, analysts questioned potential exposure. Management acknowledged the portfolio is fairly comfortable but noted the market is actively looking for bubbles.
- Despite limited direct H1B dependency, management acknowledged the need to make supply chain more resilient over 24 months. May accelerate automation and AI adoption to reduce local workforce dependence.
- Interest rate cuts have not yet translated to meaningful volume pickup. Management declined to call for mortgage-driven growth, noting false starts in past 12 months and complexity from government shutdown concerns affecting December rate decisions.
- While sequential growth has resumed for the largest customer and visibility exists for H2, the trailing 12-month impact continues to wash through arithmetic, creating uncertainty on exact timeline for full recovery.
Key quotes
- We've also had solid traction in our AI archetypes including AI ops, modernization, and data. 42% of TCV wins in Q2 are led AI with further room to expand this metric.
- In the first half of FI26, we won approximately 1.3 billion of TCV, which is more than the full year TCV wins in FI25. On a last 12 month basis, we have now closed over 2 billion in TCV.
- This naturally means that there is certain amount of delinkage between revenue growth and headcount growth which again we've been seeing for the last few quarters.
- Our focus for the last 12-18 months really has been on strengthening our propositions, creating this repeatable construct through the IP platform, embedding it into our propositions, running multiple MVPs with customers to validate this thinking.
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