Mphasis profit rises as other income lifts Q4, while margin barely improves
Revenue growth slightly outpaced expenses, but other income accounted for 7.97% of pre-tax profit and the quarter's margin remains below Q2FY26.
Filed 29 Apr 2026, 23:38 IST · after market close · Mphasis Ltd (MPHASIS)
Key takeaways
- Standalone net profit rose 9.67% sequentially, helped by other income contributing 7.97% of profit before tax.
- Operating margin edged up 0.07 percentage points sequentially as revenue grew 1.88% and expenses grew 1.80%.
- Direct EMEA revenue grew 6.9% sequentially, while the company reported $407 million of total contract wins across four large deals.
Price around the results
Other income drove much of the profit increase
Standalone revenue rose 1.88% sequentially, while net profit increased 9.67% and profit before tax rose 9.89%. Other income jumped 1,299.30% sequentially to Rs 39.74 cr and contributed 7.97% of profit before tax, making the profit increase less reliant on operating growth. The tax rate also rose 0.15 percentage points, so tax did not flatter the earnings increase.
Operating margin stabilised after the Q3 decline
Expenses grew 1.80% sequentially, slightly slower than revenue, allowing operating margin to improve by 0.07 percentage points to 21.28%. This followed a fall from 22.42% in Q2FY26 to 21.21% in Q3FY26, so the latest quarter interrupted the decline rather than fully reversing it. Depreciation increased 6.68% sequentially, while interest rose 1.06%.
EMEA and AI-led work supported business momentum
Management said direct EMEA revenue grew 6.9% sequentially, led by ramp-ups in recent large deals, while APPS revenue grew year on year on AI-led modernisation deals. The company said it won $407 million of total contract value across four large deals. Management also said it expects high-single-digit to low-double-digit growth despite an uncertain macroeconomic environment and plans to accelerate its Neo platform buildout through platform investments and the TAP acquisition.
Margin remained above the reported IT peer median
Mphasis's 21.28% operating margin was 1.59 percentage points above the 19.69% median for 19 Information Technology peers that had reported the same quarter. Management said its target is stable margins of 14.75%-15.75% and operating cash-flow conversion of 80% of net income. The company also said it delivered more than twice industry growth after entering FY26 with better-than-industry growth guidance.
Initial stock response was within its usual range
After the results were filed after market close, the stock opened 2.83% higher and ended the first session up 1.16%, with volume at 3.1 times the normal level. It was down 1.62% after five sessions and up 2.62% after 30 sessions. Across the previous eight result reactions, the stock rose five times and fell three times, with a median absolute move of 3.1%, making the initial move smaller than its typical reaction.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹2,454 cr | ₹2,409 cr | +1.88% |
| Other income | ₹40 cr | ₹3 cr | +1299.30% |
| Expenses | ₹1,932 cr | ₹1,898 cr | +1.80% |
| Operating profit | ₹522 cr | ₹511 cr | +2.19% |
| Operating margin (%) | 21.28% | 21.21% | — |
| Interest | ₹14 cr | ₹14 cr | +1.06% |
| Depreciation | ₹49 cr | ₹46 cr | +6.68% |
| Profit before tax | ₹499 cr | ₹454 cr | +9.89% |
| Tax | ₹127 cr | ₹115 cr | +10.54% |
| Net profit | ₹372 cr | ₹339 cr | +9.67% |
| EPS (₹) | ₹19.51 | ₹17.81 | +9.55% |
Operating margin of 21.28% compares with a Information Technology sector median of 19.69% across 19 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.16% | +1.90% |
| Next session | +1.15% | — |
| 5 sessions | -1.62% | -1.62% |
| 15 sessions | -1.26% | — |
| 30 sessions | +2.62% | — |
Volume on the results session was 3.10× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Direct EMEA revenue grew 6.9% sequentially, led by ramp-ups in recent large deals.
- APPS revenue grew year over year, driven by AI-led modernization deals.
Guidance & outlook
- The company expects high-single-digit to low-double-digit growth despite the uncertain macro environment.
- The company targets stable margins of 14.75%-15.75% and 80% operating cash flow to net income conversion.
Expansion
- Mphasis plans to accelerate its Neo platform buildout through platform investments and the TAP acquisition.
New orders
- Mphasis reported broad-based TCV wins of $407 million across four large deals.
Competition
- Mphasis said it delivered more than twice industry growth after entering FY26 with better-than-industry growth guidance.
Problems & risks
- The company identified the macroeconomic environment as uncertain.
What to watch
- Whether operating margin holds above 21.28% after the 0.07 percentage-point sequential improvement.
- Whether other income remains near Rs 39.74 cr or falls back from its 1,299.30% sequential increase.
- Whether direct EMEA growth follows the reported 6.9% sequential increase as recent large deals ramp up.