Mphasis (526299) Q4 25/26 earnings summary

Executive summary

• Closed FY26 with strong AI-led transformation momentum, record net new TCV of $2.1 billion (up 68% YoY), and 69% of the pipeline now AI-led.

• Direct business accounted for 98.6% of revenue, with robust growth in BFS and insurance verticals and broad-based client expansion.

• Acquisition of Theory and Practice and its Continuum AI platform accelerated decision intelligence capabilities and expanded the client base.

• Outperformed initial growth expectations, delivering more than 2x industry growth and maintaining stable margins within the 14.75%-15.75% target band.

• Board recommended a final dividend of INR 62 per share for FY26, subject to shareholder approval.

Financial highlights

• Q4 FY26 revenue: $463 million, up 2.5% QoQ and 7.1% YoY in constant currency; full-year revenue grew 6.7% in constant currency.

• Consolidated FY26 revenue was ₹158,796.47 million, up 11.6% YoY; Q4 revenue grew 14.4% YoY and 6.0% QoQ.

• EBIT/operating margin for Q4 was 15.4%, with full-year margin stable at 15.3%.

• EPS before exceptional items for FY26 was ₹99.2, up 10.4% YoY; Q4 EPS before exceptional items was ₹26.7, up 13.7% YoY.

• Operating cash flow for Q4: $21 million (normalized to $38 million after adjustments); FY26 normalized cash flow at $142 million.

Outlook and guidance

• FY27 guidance targets high single-digit to low double-digit revenue growth, driven by AI-led transformation demand.

• Margin guidance maintained at 14.75%-15.75%, with continued investments in platforms and capabilities.

• Operating cash flow to net income conversion ratio targeted at approximately 80%.

• Focus on AI-led propositions and recent acquisitions to enhance decision intelligence capabilities.