Q2 FY27 results analysis · November 05, 2026
Mphasis Ltd Q2 FY27 Results Analysis: PAT Jumps 19.6%, Cash Conversion Slips
+19.6%PAT year on year, Rs. 561.13 Cr
Source: Quarterly results filing (BSE)
Quick summary
Mphasis Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 4,580.93 Cr (+17.40% YoY) and PAT growth of +19.62% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details
| Results date | November 06, 2026 |
|---|---|
| Revenue (Q2) | Rs. 4,580.93 Cr (+17.40% YoY) |
| PAT (Q2) | Rs. 561.13 Cr (+19.62% YoY) |
| EBITDA margin | 18.10% (-39 bps YoY) |
| EPS (Q2) | Rs. 29.39 (+19.20% YoY) |
Quarter Snapshot
Mphasis delivered 17.4% YoY reported revenue growth (9.7% CC) with PAT up 19.6% and EBIT margin of 14.79% inside the guided band, while TCV of USD 466 Mn extended a six-quarter streak above USD 400 Mn. However, execution slipped on cash: H1 CFO/PAT was 0.30x vs the guided ~80%, receivables grew far faster than revenue, and the Red Oak acquisition failed to close. Insurance margin normalization and a receivables correction are the swing items for the next print.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Sequential CC growth clears the +1.5–2.5% band | "ahead of the recent +1.5%–2.5% QoQ band is the guided base case" | +3.3% QoQ CC (press release) | Played out |
| Reported growth flattered by mid-90s rupee | "reported growth aided by a rupee that sat in the mid-90s" | +17.40% reported vs +9.7% CC YoY | Played out |
| EBIT margin flat within the band at best | "reported EBIT margin flat within the band at best" | 14.79%, flat QoQ, −48 bps YoY | Played out |
| Hedge-loss drag present | "the guided hedge-loss drag… should still be present" | Present in policy terms but not quantified in the filing — amount | Not observable |
| Red Oak partial-quarter add (~0.6% per one broker, pre-call note) | "one broker estimates the Q2 contribution at ~0.6%" | Zero — deal not consummated | Contradicted |
| TCV streak extension | "a sixth consecutive quarter above $400 Mn TCV" | USD 466 Mn, 66% AI-led | Played out |
| Utilization recovery | "whether that reversal shows up this quarter" | Employee costs +2.73% QoQ vs revenue +4.49%; margin flat | Partially |
| DSO direction off 95 days | "DSO direction off 95 days" | Receivables built faster than revenue — worsened — remains open for the call | Not addressed in the filing's metrics |
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Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| FY27 CC revenue growth: high single-digit to low double-digit | Q4 FY26 earnings call; reaffirmed Q1 FY27 call | Q2 CC +9.7% YoY; H1 reported +17.43% | On Track |
| FY27 EBIT margin band 14.75%–15.75% (company EBIT definition) | Q4 FY26 and Q1 FY27 calls | 14.79% Q2; 14.78% Q1 | Met |
| Q2 FY27 "best sequential constant currency growth in three years" | Q1 FY27 call (Jul 24, 2026) | +3.3% QoQ CC vs prior best +2.5% | Met |
| OCF/net income ~80% through FY27 | Q4 FY26 call (CFO) | H1 CFO/PAT 0.30× | Missed |
| Red Oak contribution in Q2 (partial quarter) | Q1 FY27 call; Jul 1, 2026 agreement | Not consummated — zero contribution | Missed |
| DSO normalization (3–4 quarters from Q2 FY26) | Q2 FY26 call | Receivables +21.92% vs Mar vs revenue +4.49% QoQ | Missed |
| Logistics gradual recovery | Q1 FY27 call | Revenue −11.29% QoQ / −23.67% YoY | Missed |
| Insurance margin normalization by ~Q3 FY27 | Q1 FY27 call | Margin 12.98% vs 12.87% Q1; 32.45% a year ago | On Track |
Key Numbers, Quarter by Quarter
| Metric | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Q2 FY27 |
|---|---|---|---|---|---|
| Net new TCV (USD Mn) | 528 | 428 | 407 | 461 | 466 |
| AI-led % | 42 | 62 | 64 | 63 | 66 |
| EBIT margin % | 15.3 | 15.2 | 15.4 | 14.8 | 14.8 |
Key Investment Insights
Key Positives
- Revenue grew 17.40% YoY reported (9.7% CC) to Rs.4,580.93 cr; QoQ CC growth of 3.3% was the best in three years per management
- PAT grew 19.62% YoY to Rs.561.13 cr; EPS of Rs.29.39 up 19.2% YoY
- EBIT margin of 14.79% within the guided 14.75%-15.75% band, flat QoQ
- TCV of USD 466 Mn, 66% AI-led; sixth consecutive quarter above USD 400 Mn; pipeline up 23% YoY at a new high
- BFS (54% of revenue) grew 22.7% YoY with margin expansion to 32.16%; TMT grew 10.78% QoQ with +224 bps QoQ margin gain
- Insurance revenue re-accelerated to +23.91% YoY
- Normalized PAT of Rs.575.19 cr grew 22.62% YoY after adding back the TAP earn-out charge net of tax
Risk Factors
- H1 CFO/PAT of 0.30x vs guided ~80% conversion; hitting the guide requires an implausible H2 collection swing
- Trade receivables up 21.92% vs Mar-26 vs revenue +4.49% QoQ; DSO normalization promised since Q2 FY26 has not materialized
- Red Oak contract acquisition (up to Rs.265.06 cr) not consummated — zero Q2 contribution vs planned partial-quarter add
- Logistics revenue declined 11.29% QoQ and 23.67% YoY, reversing the expected gradual recovery
- Insurance margin at 12.98% remains roughly half the prior-year 32.45% level
- Standalone revenue declined 0.83% QoQ — sequential consolidated growth was substantially acquisition-driven (OKIN, TAP)
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