Mphasis Reports Solid FY26 Results, Revenue Grows 11.88% to ₹16,205cr

Mphasis Limited has announced its financial results for the fiscal year and fourth quarter ending March 31, 2026. The company reported consolidated total revenue of ₹16,205.54 crore for the full fiscal year, an increase of 11.88% year-over-year. Annual net profit stood at ₹1,862.60 crore, up 9.43% from the previous year. For the fourth quarter specifically, consolidated revenue rose 15.40% year-over-year to ₹4,350.59 crore, with net profit for the quarter at ₹509.64 crore. Mphasis also proposed a final dividend of ₹62 per equity share.

Key Financial Highlights and Investor Watchpoints

The results highlight Mphasis's sustained double-digit revenue growth in a competitive IT market. While profit growth slightly trailed revenue, it remained positive. The company's total equity increased year-over-year, suggesting an improved net worth. However, investors will be monitoring a rise in borrowings and an exceptional expense linked to labour law changes.

Recent Developments and Past Challenges

Mphasis has been active in strategic growth, including its April 2026 acquisition of decision intelligence platform provider Theory and Practice (TAP) to enhance its AI capabilities. The company has also navigated past financial and regulatory issues. This includes a substantial ₹2,286.86 crore tax demand from the Income Tax Department for Assessment Year 2023-24, which Mphasis intends to contest. Previously, in December 2025, it faced a ₹3.29 million GST penalty and a ₹123,900 fine from stock exchanges for a SEBI Listing Regulation breach.

Key Financial Metrics and Trends

The fiscal year saw continued double-digit revenue growth, reflecting strong client demand. The proposed dividend offers a direct return to shareholders. Mphasis's total equity grew from ₹96,283.96 million to ₹107,437.12 million, indicating an improved net worth. However, current borrowings increased significantly from ₹11,159.43 million to ₹17,928.85 million, a point requiring investor attention. An exceptional expense of ₹354.77 million related to labour law changes also impacted current year profitability.

Potential Risks for Investors

Investors are watching rising debt levels closely. The significant increase in consolidated current borrowings could lead to higher finance costs and greater financial leverage. The company also faces potential financial and reputational risks from outstanding tax demands, including the ₹2,286.86 crore tax claim, alongside earlier GST penalties and SEBI listing compliance issues, though these are being contested. Profit growth lagging revenue growth also suggests possible pressures on margins or operating expenses.

Competitive Landscape

Mphasis operates within the competitive Indian IT services sector, alongside major players like TCS, Infosys, and LTIMindtree. While TCS and Infosys hold larger market capitalizations and global brand recognition, Mphasis focuses on its specific market segments. Its FY26 revenue growth of 11.88% is competitive within the industry, with peers like Infosys also reporting strong growth and increased brand value.

Looking Ahead

Investors will be watching for management's commentary on the demand environment and outlook for FY27. Key areas to track include guidance on margin trends, strategies to manage higher borrowing costs, and progress in resolving outstanding tax and regulatory matters. The performance and revenue contribution from recent acquisitions, such as Theory+Practice (TAP), will also be closely monitored, alongside trends in key verticals like BFSI and updates on AI-driven services.