Mphasis , a leading IT services and solutions provider, has reported its highest quarterly revenue to date, marking significant growth and strategic advancements in the artificial intelligence (AI) domain.

Record-Breaking Financial Performance

Mphasis delivered an impressive financial performance in Q2:

The company's direct business contributed significantly, accounting for 97.5% of overall revenue. Notably, the Banking and Financial Services (BFS) vertical demonstrated robust growth of 13.8% year-over-year, despite the ATM business ramp-down.

Strong Deal Momentum

Mphasis continues to show strong momentum in deal wins:

• Six large deals secured in Q2, including one exceeding $100.00 million from a new BFS client
• First half TCV wins of approximately $1.30 billion, surpassing full-year FY25 TCV wins
• Last 12 months TCV reaching over $2.00 billion

AI-Driven Growth and Innovation

The company is leveraging AI to drive growth and innovation:

• Launched MphasisNeoIP, an AI platform integrating multiple solutions for enterprise transformation
• Pipeline reached record levels, growing 97% year-over-year
• 69% of the pipeline is AI-led, indicating a strong focus on next-generation technologies

Future Outlook

Mphasis has set ambitious targets for the future:

• Expects growth to be greater than 2x industry growth
• Targeting EBIT margin in the 14.75% to 15.75% band

The company's strong performance, coupled with its focus on AI-driven solutions and robust deal pipeline, positions it well for continued growth in the competitive IT services landscape.

Mphasis , a leading IT solutions provider specializing in cloud and cognitive services, has announced its strategic plans to leverage artificial intelligence (AI) for growth while maintaining a target operating margin range of 14.75% to 15.75%. The company also anticipates growth in the banking and financial services sector and expects improved logistics margins.

AI-Driven Strategy and Financial Performance

Mphasis reported strong financial results for the quarter ended September 30:

• Gross revenue grew 5.3% quarter-on-quarter (QoQ) and 11.4% year-on-year (YoY)
• Direct revenue increased 5.5% QoQ and 13.4% YoY
• Net profit rose 6.2% QoQ and 10.8% YoY to ₹4,691.00 million
• Earnings per share (EPS) grew 6.2% QoQ and 10.2% YoY to ₹24.70

The company's focus on AI-led initiatives has resulted in significant deal wins, with new Total Contract Value (TCV) of $528.00 million in Direct business, of which 87% is in new-gen services.

Strategic Partnerships and AI Integration

Nitin Rakesh, CEO and Managing Director of Mphasis, emphasized the company's early investments in AI, stating, "Our early, focused investments in AI have positioned Mphasis as a strategic partner for clients navigating their transformation journey. Another strong quarter of TCV wins of $528.00 million is a testimony to our AI first approach delivering business outcomes, across diverse industries."

Key partnerships highlighting Mphasis' AI-driven approach include:

1. A major US-based airline selected Mphasis for managed cloud and applications services, leveraging AI for efficient AI Ops.
2. A Hi-Tech device manufacturing giant partnered with Mphasis to transform its R&D Engineering Platform Support ecosystem using AI-driven automation.
3. A leading US wireless telecommunications company chose Mphasis for transformational Salesforce development services.

Innovation and Industry Recognition

Mphasis continues to innovate in the AI space, recently launching Mphasis NeoIP™, a unified AI Platform with purpose-built agents. This platform orchestrates AI solutions to deliver impactful outcomes across the entire enterprise IT value chain.

The company's efforts in AI and digital transformation have been recognized by industry analysts:

• Featured in Forrester's The AI Consulting Services Landscape
• Recognized as a Major Contender in various Everest Group PEAK Matrix® Assessments, including Digital Workplace Services and Application Transformation Services for AI-enablement
• Positioned in Horizon 1 by HFS in HFS Horizons for Mortgage Reinvention and Cybersecurity Services

Future Outlook and Sector-Specific Expectations

Mphasis aims to achieve growth more than twice the industry average, citing strong performance in the first half of the fiscal year and successful conversion of TCV wins into revenue. The company plans to focus on:

1. Pursuing, winning, and executing at the account level
2. Expanding the Mphasis NeoIP™ suite of agents
3. Converting pipeline to TCV and TCV to revenue
4. Maintaining the target operating (EBIT) margin within the 14.75% - 15.75% range

In addition to these general strategies, Mphasis anticipates growth in the banking and financial services sector from October to March. The company sees increased demand for AI-driven contracts from the banking sector, aligning with its AI-focused approach.

Regarding logistics operations, Mphasis acknowledges that they were affected in July to September primarily due to investments. However, the company expects a significant increase in logistics operations margin from October to December.

It's worth noting that furloughs from October to March may differ from last year, indicating potential changes in workforce management strategies.

As Mphasis continues to position itself as an AI-led, platform-driven company, it remains committed to helping global enterprises modernize, infuse AI, and scale with agility in an increasingly dynamic AI-first world. The company's focus on the banking sector and anticipated improvements in logistics margins demonstrate its adaptability to market demands and operational efficiency efforts.