Mphasis revenue rises 17.4% on AI-led contract wins

Mphasis reported a 17.4% year-on-year rise in second-quarter revenue for FY27 and recorded USD 466 million in new contract wins during the quarter.

Earnings per share rose 19.2% from a year earlier to ₹29.4, while revenue increased 4.5% from the previous quarter on a reported basis.

In US dollar terms, revenue grew 9.2% year on year and 3.2% quarter on quarter. On a constant-currency basis, it rose 9.7% from a year earlier and 3.3% from the prior quarter.

Direct revenue, which Mphasis reports separately, increased 10.7% year on year in US dollar terms and 11.3% in constant currency. Quarter on quarter, direct revenue rose 3.4% in US dollar terms and 3.5% in constant currency.

Artificial intelligence-related work accounted for a large share of new business, with 66% of the quarter's USD 466 million in total contract value wins classified as AI-led.

The results point to continued client spending on projects that combine technology upgrades with operational change, particularly in financial services, telecommunications, technology and healthcare.

Margins

Gross margin stood at 27.1%, up 20 basis points from the previous quarter but down 100 basis points from a year earlier. Operating margin was 14.8%, unchanged from the prior quarter and 50 basis points lower year on year.

Net margin improved to 12.2%, up 100 basis points quarter on quarter and 20 basis points from a year earlier.

Total pipeline reached a new high, rising 4.4% sequentially and 23% year on year.

"We are building a platform-first thesis, that makes AI adoption at scale real for large enterprises. Our Mphasis TriaTM led business modernisation and business reimagine are emerging as big themes that continue to drive pipeline and wins, unlocking budgets beyond the technology functions, as it widens the set of challenges we can solve for clients. Total pipeline reached a new high, growing 4.4% sequentially and 23% YoY," said Nitin Rakesh, Chief Executive Officer and Managing Director, Mphasis.

New deals

Among the quarter's contract wins, a large broker-dealer selected Mphasis as a strategic partner to scale its advisor administration business. The work covers front- and middle-office functions and uses a recurring revenue-sharing model that could expand across a wider advisor ecosystem.

A technology client awarded Mphasis a multi-year contract to provide enterprise technology services across SAP, Oracle, Azure monitoring, and testing and automation. The engagement supports both modernisation work and existing technology operations.

In telecommunications, Mphasis secured a multi-year managed services deal to support the modernisation and scaling of a digital commerce platform for a large operator. The project includes AI-enabled engineering and delivery work tied to platform efficiency and software development.

Mphasis also expanded work with a global managed healthcare and health services organisation through a multi-phase engagement covering enrolment and billing, contact centre operations, and back-office functions. The assignment includes platform-led transformation, agentic AI orchestration, and a cloud-based contact centre model, with scope for further expansion in the client relationship.

Sector focus

The spread of wins across financial services, telecommunications, technology and healthcare gives a clearer picture of where clients are continuing to commit spending. The mix also suggests outsourcing demand remains tied not only to new AI projects but also to longer-running efforts to update systems and reshape operating models.

Mphasis also highlighted several mentions and rankings by industry analyst firms during the period, including in infrastructure outsourcing, application management, cybersecurity, Azure services, and quality engineering for AI applications. Those references accompanied the quarterly performance update rather than forming part of the financial results.

The quarter's figures leave Mphasis with rising revenue, improved earnings per share, and a sizeable book of new work, even as operating margins remained under pressure compared with the same period a year earlier.

New contract wins totalled USD 466 million in the quarter, and two-thirds of that business was linked to AI-led work.