SMAR Daily Industry News

Mphasis Increases FY27 Growth Outlook Following Q2 Results

Mphasis has updated its revenue growth guidance for FY27, now projecting growth in the low double-digit range. This adjustment follows the company's second-quarter performance, which saw dollar revenue grow 9.2% year-on-year to $486.1 million. Previously, the company anticipated growth ranging from high single digits to low double digits.

Sequential revenue growth reached 3.2%, while constant-currency growth was recorded at 3.3% quarter-on-quarter and 9.7% year-on-year. In rupee terms, revenue rose 17.4% annually to ₹4,580.9 crore. Net profit for the period increased 19.6% year-on-year to ₹561.1 crore, with earnings per share rising 19.2% to ₹29.4.

During the quarter, Mphasis secured $466 million in new total contract value (TCV), a decrease from the $528 million reported in the previous quarter. Of this new TCV, 66% was classified as AI-led, compared to 42% in Q2 FY26 and 63% in Q1 FY27. The company finalized five deals valued at over $20 million each. CEO and MD Nitin Rakesh noted that the company's pipeline grew 4.4% sequentially and 23% year-on-year, driven by demand for business modernization and reimagining projects.

Operational metrics showed mixed results. The operating margin remained flat sequentially at 14.8%, a 50 basis point decline from the previous year. Operating cash flow turned negative at ₹54.8 crore, and free cash flow was negative ₹62 crore. The company attributed this decline partly to $39.5 million in remittances initiated on September 30 and received in October. After adjusting for these, normalized cash flow was ₹322.9 crore.

Why it matters

Investors and industry observers should monitor whether Mphasis can sustain its AI-led deal momentum and normalize cash flow amid broader workforce and utilization pressures impacting the Indian IT sector.

FAQ

What is the new revenue growth guidance for Mphasis in FY27?
The company has raised its guidance to the low double-digit range.

How much of the new total contract value (TCV) was AI-led?
66% of the $466 million in new TCV was classified as AI-led.

Why did Mphasis report negative operating cash flow?
The company attributed the decline partly to $39.5 million in remittances that were initiated on September 30 and received in October.

Source: Analytics India Magazine. See the original source for full details.