This article first appeared on GuruFocus .
Release Date: October 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Mphasis Ltd ( BOM:526299 ) reported its highest ever quarterly revenue of $445 million, growing 2% sequentially and 6% year over year in constant currency terms.
-
The company achieved strong TCV wins of $528 million for the quarter, marking the second successive quarter with over half a billion dollars in TCV.
-
Mphasis Ltd ( BOM:526299 ) launched a new AI platform, New IP, which integrates multiple AI solutions for continuous enterprise transformation.
-
The BFS pipeline grew by 45% year over year, and the non-BFS pipeline increased by 139% year over year, indicating strong future growth potential.
-
The company reported a stable operating margin of 15.3%, with operating profit growing 4.4% sequentially and 9.5% year over year.
Negative Points
-
The BFS segment showed some sequential softness, partly due to the impact of the ATM business.
-
The logistics and transportation vertical experienced a margin decline, turning into losses this quarter due to specific investments.
-
There is uncertainty regarding the impact of macroeconomic factors and potential seasonality effects on future quarters.
-
The company faces challenges in deal conversion timelines, with some deals requiring 3 to 6 months for ramp-up.
-
Currency fluctuations have impacted financials, with hedge losses expected to continue due to the depreciating rupee.
Q & A Highlights
-
Warning! GuruFocus has detected 2 Warning Signs with BOM:526299.
-
Is BOM:526299 fairly valued? Test your thesis with our free DCF calculator.
Q: Can you provide an update on the expected growth for the next two quarters, particularly in light of the deal ramp-ups and any impact from the ATM business? A: The impact of the ATM business was more year-over-year, with a muted sequential impact. Our BFS business has grown significantly over the last few quarters, and we expect continued growth in the second half of the year. Deal conversions from Q1 and Q2 are on track, and while it's too early to predict seasonality and furlough impacts, we anticipate decent growth in the second half, potentially more in Q4 than Q3. - Nitin Rakesh, CEO
Q: Regarding the logistics vertical, when do you expect it to return to double-digit growth, and how is the refinance business in BFSI expected to perform? A: We expect sequential growth in the logistics vertical in Q3, but double-digit year-over-year growth may take time due to previous ramp-downs. For the refinance business, while interest rates have come down, it's uncertain when volumes will pick up. However, we have seen proactive client engagement, and any increase in volumes would be a welcome tailwind. - Nitin Rakesh, CEO
Q: Can you explain the negative margin in the travel and logistics segment this quarter? A: The negative margin was due to specific investments made in the vertical, which are one-time in nature. We expect a return to normalcy in margins from Q3 onwards, with a sharp uptick as new deals ramp up. - Aravan Vishwanathan, CFO
Q: With strong deal closures, can we expect TCV numbers to remain above $300-400 million as a new normal? A: While large deals can be lumpy, our trajectory and run rate have increased over the last few quarters. It's best to look at a trailing 12-month metric for a more accurate picture, but we are optimistic about maintaining strong TCV numbers given the pipeline strength. - Nitin Rakesh, CEO
Q: How is the AI platform adoption progressing, and does it lead to multi-tower deal constructs? A: The AI platform has increased our competitiveness and sharpened our messaging to customers. It often leads to multi-tower deals, encompassing various services like application development, modernization, and cloud operations. The platform is embedded in many client environments, enhancing our ability to win larger deals. - Nitin Rakesh, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
