⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
MPHASIS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | MPHASIS | Market Cap | 52,757 Cr. | Current Price | 2,770 ₹ | High / Low | 3,037 ₹ |
| Stock P/E | 37.0 | Book Value | 307 ₹ | Dividend Yield | 2.06 % | ROCE | 33.7 % |
| ROE | 25.2 % | Face Value | 10.0 ₹ | DMA 50 | 2,822 ₹ | DMA 200 | 2,773 ₹ |
| Chg in FII Hold | 1.27 % | Chg in DII Hold | 8.18 % | PAT Qtr | 364 Cr. | PAT Prev Qtr | 393 Cr. |
| RSI | 44.7 | MACD | -17.2 | Volume | 1,68,239 | Avg Vol 1Wk | 4,22,831 |
| Low price | 2,025 ₹ | High price | 3,037 ₹ | PEG Ratio | 5.06 | Debt to equity | 0.09 |
| 52w Index | 73.6 % | Qtr Profit Var | -3.19 % | EPS | 73.6 ₹ | Industry PE | 23.9 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT declined slightly from 393 Cr. to 364 Cr. (-3.19%), but overall profitability remains strong. EPS at 73.6 ₹ reflects solid earnings power.
- Margins: ROCE at 33.7% and ROE at 25.2% indicate excellent efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.09 shows negligible leverage, strengthening financial stability.
- Cash Flow: Dividend yield of 2.06% provides steady shareholder returns, supported by strong cash generation.
💹 Valuation Indicators
- P/E Ratio: 37.0 vs Industry PE of 23.9 → Premium valuation compared to peers.
- P/B Ratio: Current Price (2,770 ₹) / Book Value (307 ₹) ≈ 9.0 → High, reflecting market confidence but expensive.
- PEG Ratio: 5.06 → Suggests overvaluation relative to growth prospects.
- Intrinsic Value: Current price trades above fair value zone, limiting near-term upside.
🏭 Business Model & Competitive Advantage
- Mphasis operates in IT services, focusing on digital transformation, cloud, and next-gen solutions.
- Strong client relationships and niche positioning in BFSI and digital services provide competitive edge.
- High ROCE and ROE highlight operational excellence and scalability.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 2,400 ₹ – 2,550 ₹, closer to support levels and below DMA 200.
- Long-Term Holding: Strong fundamentals and low debt make it suitable for long-term investors, though current valuations suggest staggered buying.
✅ Positive
- High ROCE (33.7%) and ROE (25.2%) indicate strong efficiency.
- Low debt-to-equity ratio ensures financial resilience.
- Dividend yield of 2.06% supports shareholder value.
- Strong institutional support with FII (+1.27%) and DII (+8.18%) increases.
⚠️ Limitation
- High P/E and P/B ratios make the stock expensive relative to peers.
- PEG ratio of 5.06 signals overvaluation against growth.
- Quarterly PAT decline (-3.19%) shows short-term weakness.
📉 Company Negative News
- Quarterly PAT dropped from 393 Cr. to 364 Cr.
- Volume weakness compared to average suggests reduced trading interest.
📈 Company Positive News
- Strong institutional inflows: FII holding up 1.27%, DII holding up 8.18%.
- Dividend yield above 2% provides consistent returns.
- EPS of 73.6 ₹ highlights robust earnings capacity.
🌐 Industry
- IT services sector benefits from global digital transformation demand.
- Industry PE at 23.9 indicates peers trade at lower valuations, showing Mphasis commands a premium.
🔎 Conclusion
Mphasis demonstrates strong fundamentals with excellent return ratios, low debt, and institutional support. However, valuations are stretched with a high P/E, P/B, and PEG ratio. Investors may consider entering around 2,400–2,550 ₹ for long-term holding, while avoiding aggressive buying at current levels. The company remains fundamentally healthy and well-positioned in IT services, but patience is key for value-conscious investors.
I can also map out technical support and resistance levels using RSI, MACD, and DMA data to complement this fundamental view if you'd like.