1. At a Glance
Mphasis posted a neat Q1 with ₹4,417 Cr in net profit, 9.2% revenue YoY jump, and USD 760M in TCV wins. Meanwhile, Blackstone still holds the backstage remote. But with sales crawling at 6–10% CAGR over the last few years, investors are wondering – is this an IT sprint or a slow-mo yoga class?
2. Introduction with Hook
If TCS is the IPL of IT services, Mphasis is the Ranji Trophy — technically proficient, but not exactly pulling stadium crowds. It’s like ordering pizza from a 5-star hotel: high quality, slow delivery, and a big bill. Still, this Blackstone-backed IT horse clocked ₹14,540 Cr revenue TTM and 19% OPM — not bad for a company often confused with a speech impediment.
3. Business Model (WTF Do They Even Do?)
Mphasis is the low-key cousin at the tech family reunion. They provide cloud and cognitive services (read: “AI things to sound smart on calls”) to banking, insurance, and logistics clients.
They basically:
- Maintain enterprise systems like glorified digital janitors
- Offer cloud migration (because everyone’s allergic to on-prem now)
- Sell AI-led platforms but still attend meetings in Excel
Clients include US-based BFSI giants and Fortune 500s who have enough money to throw at “digital transformation” every 6 months.
4. Financials Overview
Here’s the financial tale — sprinkled with some seasoning:
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) | OPM % |
|---|---|---|---|---|
| FY23 | 13,798 | 2,434 | 1,638 | 18% |
| FY24 | 14,230 | 2,647 | 1,702 | 19% |
| TTM | 14,540 | 2,731 | 1,739 | 19% |
- Margins: As stable as an IT guy’s coffee addiction.
- Growth: If slow & steady wins the race, this is your tortoise.
- Dividend payout: ~63% — a nice thank-you note from management.
5. Valuation
Let’s play “Guess the Fair Value” using:
A. P/E Valuation:
- EPS (FY25): ₹89.5
- Reasonable P/E band: 22–26x
- FV Range: ₹1,969 – ₹2,327
B. EV/EBITDA Valuation:
- EBITDA (TTM): ₹2,731 Cr
- EV/EBITDA band: 14–16x
- Fair Value Range: ₹2,150 – ₹2,460 (post adjusting for debt & cash)
Conclusion:
If you think paying 30x earnings is sensible, you probably also buy Rs. 50 water bottles at airports.
6. What’s Cooking – News, Triggers, Drama
This quarter’s masala thali:
- AI-Led Growth: Sounds cool. Revenue? Still growing slower than your SIP.
- USD 760M TCV: Big number. But TCV is the new “we’ll call you back.”
- Patent granted: For a quantum prediction system. Not a Marvel movie plot.
- Center in Buenos Aires: New delivery hub. Cheaper coders, better steak.
- SecPod Partnership: For cybersecurity. Because hackers don’t wait for quarterly calls.
Plot twists? Limited. This is not Zee TV.
7. Balance Sheet
| FY25 (₹ Cr) |
|---|
| Equity + Reserves |
| Borrowings |
| Total Assets |
- Debt: Manageable. Not Titanic-level, but the ship occasionally creaks.
- Reserves: Big cushion. Probably enough to fund another CoE in Prague.
8. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | 1,462 | 196 | -1,440 |
| FY24 | 2,180 | -2,496 | 77 |
| FY25 | 1,905 | 32 | -1,756 |
- Cash from ops: Strong, steady, like that one friend who shows up on time.
- Investing CF: Wild swings. Looks like Mphasis buys startups the way we impulse-buy on Flipkart.
- Financing CF: Outflows = Dividends + buybacks = shareholder candy.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 18% |
| ROCE | 23% |
| PAT Margin | 12% |
| P/E | 29.9 |
| D/E | 0.12 |
Verdict?
- ROCE is hotter than Elon Musk’s latest tweet.
- Debt under control.
- But that P/E? Yikes. Someone’s paying premium for stability.
10. P&L Breakdown – Show Me the Money
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 13,798 | 2,434 | 1,638 |
| FY24 | 14,230 | 2,647 | 1,702 |
| FY25 | 14,540 | 2,731 | 1,739 |
Analysis:
- PAT grew 2% YoY — if you squint really hard.
- Sales are like a tired treadmill. Always moving, but slowly.
- EBITDA margins are strong enough to make CFOs smile in their sleep.
11. Peer Comparison
| Company | Rev (Cr) | PAT (Cr) | P/E |
|---|---|---|---|
| TCS | 2,56,148 | 49,273 | 23.0 |
| Infosys | 1,65,954 | 27,266 | 23.0 |
| HCL Tech | 1,19,347 | 16,976 | 23.9 |
| LTIMindtree | 38,706 | 4,719 | 32.3 |
| Mphasis | 14,540 | 1,739 | 29.9 |
Mphasis:
Looks like the least drunk guest at a wedding full of finance bros.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar 2023 | Mar 2025 |
|---|---|---|
| Promoters | 55.6% | 40.1% |
| FIIs | 17.7% | 18.9% |
| DIIs | 21.0% | 36.5% |
| Public | 5.6% | 4.4% |
- Blackstone trimmed stake. DIIs gobbled it up faster than buffet starters.
- No big M&A drama, just one quiet €30M infusion into Europe BV.
- Management musical chairs — new Head of Strategic Sales, a few shuffles.
Promoter Bios?
Just imagine Blackstone’s India team in blazers that cost more than your demat portfolio.
13. EduInvesting Verdict™
Mphasis is your clean, calm, well-behaved IT stock. It’s like your friend who drinks green tea and sleeps on time. Reliable, safe… and a little boring.
- Dividend-happy? Yes.
- Debt-light? Absolutely.
- Growth rocket? Not really.
A decent pit stop. But don’t expect business class legroom.
Written by EduInvesting Team | 25 July 2025
Tags: Mphasis, IT Services, Analysis, EduInvesting Premium
