Mphasis reports strong Q2 performance with record revenue, AI-led growth

Mphasis reported its highest-ever quarterly revenue of $445m in Q2 FY26, a 2% sequential and 6% YoY increase in constant currency terms. The company’s direct business contributed 97.5% to total revenue, growing 2.2% sequentially and 7.9% YoY in constant currency. Notably, BFS grew 13.8% YoY, while Insurance and TMT verticals both registered over 25% YoY growth. Direct BFS saw a 17.3% YoY increase, driven by wallet share gains and new account wins.

The company achieved strong total contract value (TCV) wins, totaling $528m for the quarter, marking the second consecutive quarter above $0.5bn. In the first half of FY26, TCV wins amounted to approximately $1.3bn, surpassing the full year TCV wins of FY25. On a last 12-month basis, Mphasis closed over $2bn in TCV. AI-led deals constituted 42% of TCV wins in Q2, with the pipeline growing 9% sequentially and 97% YoY, with 69% of the pipeline being AI-led. EBIT margin remained stable at 15.3%, and operating profit grew 4.4% sequentially and 9.5% YoY to INR 5,959m.

Mphasis launched NeoIPTM, a breakthrough AI platform, and sustained investments in AI-driven growth initiatives. The company expects continued strong pipeline-to-TCV and TCV-to-revenue conversion, targeting growth greater than 2x industry growth in the second half of the year, with an operating EBIT margin target of 14.75% to 15.75%.