Mphasis Q1 FY27 Results (NSE: MPHASIS)
Signal: Growth reaccelerated
The read
Q1FY27 revenue accelerated to +17.5% YoY (vs +14.4% in Q4FY26) on broad-based growth, but EBIT margin contracted 52bps YoY to 14.78% — at the low end of FY27 guidance — as other expenses (subcontractor/acquisition costs) surged 33%, overwhelming employee-cost efficiencies. PAT fell 4% QoQ, and Insurance profit halved. Margin trajectory warrants close watch.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,384.05 Cr | 17.5% | 3.3% |
| EBIT | ₹648.11 Cr | 13.5% | |
| Net profit | ₹489.51 Cr | 10.8% | |
| EPS | ₹25.65 | 10.5% | |
| EBIT margin | 14.8% |
P&L walk
Revenue grew 17.5% YoY driven by BFS and TMT, but a 33% surge in other expenses (subcontractor/acquisition costs) outpaced revenue, compressing EBITDA margin by ~100bps and EBIT margin by 52bps YoY; PAT growth of 10.8% lagged revenue, and QoQ PAT fell 4%.
Segments
Revenue growth was led by Banking & Financial Services (+19.7% YoY to ₹23,548m) and Technology Media & Telecom (+20.2% YoY to ₹8,124m); Insurance revenue rose 30.5% but its segment profit plunged 52% YoY to ₹857m, dragging consolidated margins. Logistics & Transportation revenue declined 13.5% YoY.
Key positives
- Revenue growth accelerated to 17.5% YoY, the fastest in over a year, driven by strong BFS (+19.7%) and TMT (+20.2%) segments.
- Employee cost as % of revenue improved 260bps YoY to 54.9%, reflecting ongoing automation and offshoring.
- Unmodified audit opinion; no exceptional items or one-offs in the quarter.
- Sequential revenue growth of 3.3% in a seasonally weak June quarter.
Key concerns
- EBIT margin contracted 52bps YoY to 14.78% (low end of FY27 guidance) due to a 33% surge in other expenses (subcontractor/acquisition costs).
- PAT declined 4% QoQ despite revenue growth, indicating margin pressure.
- Insurance segment profit halved to ₹857m (down 52% YoY) even as revenue grew 30%, suggesting cost overruns or contract mix shift.
- Logistics & Transportation revenue fell 13.5% YoY, signaling client-specific weakness.
Research and educational content only. Not investment advice.