Synopsis
Mphasis has taken the spotlight with stellar financial results for the fourth quarter of fiscal year 2026, celebrating a solid 14.1 percent boost in net profit year-on-year. The company’s revenue also saw a healthy climb, up 14.4 percent over the same period. This impressive growth is largely attributed to innovative contracts won through their AI-driven initiatives.Listen to this article in summarized format
The net profit growth excludes the impact of the new Labour Code charges incurred in the third quarter. Including the impact, it translates to a 15.3% gain sequentially.
The Bengaluru-headquartered company, aided by AI-led deals, posted a 14.4% growth YoY in revenue for the quarter at Rs. 4242.7 crore, while increasing 7.1% in constant currency terms.
Brokerages on average expected the topline to grow 2.5% sequentially, in constant currency terms.
“The headline conversation has only gotten harsher in the last three months, but the reality is that clients are not pulling back (tech spending),” chief executive officer, Nitin Rakesh, told ET in a post-earnings interaction.
“While we are not seeing broad-based deferral of spends, we are definitely seeing extreme prioritisation, but the innovation (with AI) is driving a sense of urgency with customers,” he added.
For the full fiscal year, revenue gained 6.7% to clock $1.79 billion, compared with $ 1.68 billion posted in FY25. In rupee terms, full-year revenue stood at Rs. 15,879.6 crore. Net profit for the year stood at Rs. 1889.2 crore, gaining 11%.
The results follow large-cap IT service providers’ quarterly numbers last week, where giants like Tata Consultancy Services, Infosys and Wipro, among others, reported either weaker fourth-quarter numbers or muted guidance, on account of geopolitical and macroeconomic uncertainties, impacting deal ramp-ups, along with AI-led revenue compression.
Deal bookings for the January-March period stood at $407 million, marginally lower compared with $428 million in the previous quarter, although it gained 4.3% year-on-year. 64% of the deals were AI-led, the company said, compared with 59% in the same period a year earlier.
“In the near-term, AI will drive productivity gains, which might create some localised pricing pressures. But the real opportunity is that you can offset it by expanding the scope (of work),” Rakesh said, highlighting new spend categories such as data platforms and decision intelligence.
The company acquired Canada-based decision intelligence company, Theory and Practice Business Intelligence Inc. (TAP), earlier in the month. The acquisition has an upfront consideration of CAD 10 million at closing, with management milestone-based, multi-year contingent consideration of up to CAD 20 million.
While the management did not provide details on how much the acquisition is expected to contribute to the topline, it is expected to bring IP and AI-native talent on board.
Revenue growth was led by its largest vertical, banking and finance, which gained 15% in constant currency terms, while insurance, its second-largest sector, advanced 45.6%. Logistics & transportation vertical, however, was a drag, down 50.1% YoY.
Among geographies, the Americas led growth with a 9.5% YoY gain, while Europe, the Middle East, and Africa (EMEA) grew by a modest 0.4%. Other geographic segments, however, declined by 9.4%.
