Buy Mphasis; target of Rs 3079: Anand Rathi

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Mphasis delivered a strong Q2FY27, marking its best sequential cc growth in three years, supported by broad-based traction across BFS, Insurance, and TMT.
  • The company's Tria platform is emerging as a differentiator in large deal evaluations, enabling Mphasis to move beyond traditional IT budgets into business process transformation and outcome-linked engagements.
  • Management raised FY27 revenue growth guidance to low double digits, signalling confidence in sustaining the growth momentum through H2.
  • Operating margin declined 40bps q/q to 15.9%, due to higher onsite deployment requirements, acquisition-related amortisation, and continued investments in AI capabilities and client coverage.

Thesis Validation Checklist

  • Investors should watch for sustained growth momentum, improvement in operating margins, and successful monetisation of the Tria platform.
  • Key signals to validate the thesis include: (1) consistent deal wins and revenue growth, (2) improvement in operating margins, and (3) successful deployment of the Tria platform.
  • Risks to the thesis include a slowdown in the US, sustained margin pressure, delay in large deal ramp-up, and weaker OCF/PAT conversion.