Winter to spring. Initiate at Neutral

Research evidence excerpt

Winter to spring. Initiate at Neutral

Accessible version

Mphasis

Initiating Coverage: NEUTRAL | PO: 2,440 INR | Price: 2,265 INR

FY26 likely marked end of firm-specific headwinds 25 June 2026

We see Mphasis as a mid-sized IT services firm with strong positioning in financial Equity

services sector and adding capabilities in AI for business operations. Its last 4yr organic

revenue CAGR of 2% (FY22-26) trailed the peer set by a quantum, as it absorbed Kunal Tayal >> Research Analyst

multiple portfolio-specific headwinds related to certain large accounts, de-prioritization BofAS India

of certain contracts & exposure to US mortgage sector. We think these are now done +91kunal.tayal@bofa.com22 6632 8663

with and company's favorable exposure and positioning in the BFSI sector (67% of Jatin Kalra, CFA >>

revenue) – where services spend are faring the best – should help it post stronger Research Analyst

BofAS India

revenue growth over the next three years. This said, more diversified growth profile by +91 22 6632 8390

industry (TMT could be source of softness in near term given expected completions and jatin.kalra3@bofa.com

delayed decision making) and early days in making AI a meaningful driver of growth lead

us to initiate the stock at Neutral. Our PO of INR 2,440 is based on 20x FY28 P/E.

Stock Data

Success in AI modernization is a key source of upside

Last several years, we see Mphasis as having invested mainly in differentiation by Price 2,265 INR

industry-specific capabilities - particularly in BFS - leading to good wallet share gains Price Objective 2,440 INR

with marquee customers. With competition catching up, we view success in its offerings Date Established 25-Jun-2026

around AI-led modernization as the next source of outperformance.