Mphasis Limited (NSE: MPHASIS) has reported a stellar performance for the quarter, marking a significant milestone with its highest-ever quarterly Total Contract Value (TCV) wins of $760 million. The IT services company's strong deal momentum was largely propelled by AI-led solutions, which accounted for 68% of the new contracts.

Financial Highlights

• Revenue reached $437.00 million, reflecting a 1.0% quarter-over-quarter and 6.5% year-over-year growth in constant currency terms.
• Direct business contributed 97% of overall revenue.
• EBIT margin remained stable at 15.3%.

Deal Wins and Business Performance

Mphasis secured four large deals during the quarter, including three deals worth over $100 million each and one exceeding $50 million. The company's success in deal wins was broad-based across verticals:

• Banking, Financial Services (BFS), Insurance, and Technology, Media & Telecom (TMT) verticals drove growth.
• The Insurance vertical demonstrated exceptional performance, growing over 20% sequentially and 27.5% year-over-year.

AI-Driven Growth

The company's focus on AI-led solutions has paid off significantly:

• 68% of the $760.00 million TCV wins were AI-led deals.
• Mphasis has over 250 AI/ML models available on Amazon, Microsoft, and Google marketplaces.
• The company's AI pipeline has grown 2.2x since the launch of Mphasis.ai.

Strong Pipeline Growth

Mphasis reported robust growth in its deal pipeline:

• Overall pipeline grew 16% quarter-over-quarter and 84% year-over-year.
• BFS pipeline increased by 47% year-over-year.
• Non-BFS pipeline surged by 108% year-over-year.

Future Outlook

Mphasis expects to achieve approximately 2x industry growth with target EBIT operating margins between 14.75% to 15.75%.

Nitin Rakesh, CEO of Mphasis, commented on the results during the earnings call, "We are very pleased with our highest-ever TCV wins of $760 million, which included three $100+ million and one $50+ million deal. Our approach to dealing with any headwinds has been to sell our way out by creating deals using our propositions and differentiation."

The company's strong performance and outlook underscore its successful strategy in leveraging AI-driven solutions and maintaining a robust deal pipeline across various sectors. As Mphasis continues to focus on AI-led growth initiatives and expanding its offerings, it appears well-positioned to capitalize on the increasing demand for advanced technology solutions in the evolving business landscape.

Mphasis , a leading IT services company, is experiencing strong demand for AI-led solutions as enterprises focus on efficiency-driven investments. The company has set an ambitious target of achieving a 14.75% to 15.75% EBIT margin in FY26, supported by the growing adoption of artificial intelligence (AI) across industries.

Record-Breaking Contract Wins

Mphasis reported its highest Total Contract Value (TCV) wins of $760.00 million in Q1FY26, with an impressive 68% of these contracts being AI-driven. This record-breaking performance underscores the company's strong position in the AI solutions market and its ability to meet the evolving needs of its clients.

AI as a Key Growth Driver

CEO Nitin Rakesh highlighted the increasing importance of AI in enterprise strategies, stating that companies are prioritizing AI initiatives to achieve 20-25% efficiency gains while reducing headcount dependency. This shift in focus is driving demand for Mphasis's AI-led solutions and services.

CFO Aravind Viswanathan emphasized that AI serves as both a scaling opportunity and a margin lever for the company. This dual role of AI is expected to contribute significantly to Mphasis's targeted EBIT margin improvement.

Changing IT Landscape

Rakesh noted a significant shift in the IT services landscape, with companies moving away from blanket IT budgets to more rigorous program-by-program approval processes focused on return on investment. This change has led to a transition from people-based IT services to tech solutions-based services that bundle AI capabilities, aligning well with Mphasis's strengths in AI-driven solutions.

Recent Acquisitions and Partnerships

The company has been actively expanding its capabilities through strategic acquisitions and partnerships:

1. In October 2024, Mphasis acquired certain security assets of EDZsys Systems, enhancing its cybersecurity offerings.
2. In February 2025, the company obtained control over a software testing business from SDS Inc., strengthening its quality assurance capabilities.
3. In July 2025, Mphasis entered into a framework agreement with Lucan Software Inc., potentially expanding its service offerings further.

These strategic moves are expected to complement Mphasis's AI-driven growth strategy and contribute to its long-term financial goals.

Financial Outlook

While specific financial figures for the recent quarter were not provided, the company's focus on AI-led solutions and record contract wins suggest a positive outlook. The targeted EBIT margin of 14.75% to 15.75% for FY26 indicates confidence in the company's ability to improve profitability through its AI-centric approach.

Conclusion

As Mphasis continues to leverage AI technologies and expand its service offerings, investors and industry observers will be keenly watching the company's progress towards its FY26 financial targets and its ability to capitalize on the growing demand for AI-led solutions in the enterprise market.