MPHASIS - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.6

Here’s a detailed take on MPHASIS — a mid-to-large cap IT services player known for its agile delivery, digital focus, and steady profitability.

💼 Core Financials Breakdown

Profitability

ROCE: 22.7% and ROE: 18.2% signal solid efficiency in capital deployment.

EPS of ₹91.6 underlines consistent earnings quality, although quarterly variation is minimal (9.19%).

Quarterly Performance

PAT stability at ₹442 Cr. vs ₹446 Cr. prior — no surprises, but hints at plateaued growth.

Leverage & Liquidity

Debt-to-equity of 0.12 is pristine, providing balance sheet strength and financial agility.

Dividend Yield

Decent 2.05% yield — slightly better than industry averages for passive investors.

📊 Valuation Metrics

Metric Value Insight

P/E Ratio 30.4 Slightly expensive compared to Industry PE of 29.1

P/B Ratio ~5.47 Rich valuation given moderate ROE

PEG Ratio 5.36 Significantly high, suggests stock is overvalued relative to earnings growth

Intrinsic Value ✖ Likely below current market price due to growth lag and valuation stretch

Conclusion: Stock appears fully priced. Growth multiple (PEG) is concerning for near-term accumulation.

🏢 Business Model & Moat

MPHASIS delivers IT solutions across banking, insurance, and emerging tech verticals, with digital at its core.

Its agility and client intimacy strategies cater well to Fortune 500 companies, particularly in BFSI.

Competitive edge lies in cloud transformation and cognitive services, but faces tough competition from larger peers like Infosys and TCS.

Margin stability is commendable, but future alpha depends on securing large deals in growth geographies.

📉 Technical & Sentiment Signals

RSI at 51.1 — neutral, indicating consolidation.

MACD at -5.68 — bearish divergence, suggesting possible short-term weakness.

Current price slightly above 50-DMA (₹2,716) and 200-DMA (₹2,664) — near support zones but momentum fading.

FII holding decline (-1.62%) vs DII increase (1.60%) — might imply institutional rotation.

🎯 Entry Zone & Holding View

Entry Zone: ₹2,650–₹2,700 range — accumulate only on dips, below DMA thresholds.

Long-Term Thesis

Suitable for stable wealth compounding, but not for aggressive growth seekers.

Recommend cautious accumulation and reevaluation after next earnings cycle.

If you’d like, I can contrast Mphasis with Coforge or LTIMindtree for sharper clarity on IT segment competitiveness. Just say the word.

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