MPHASIS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Overview

Profitability

PAT declined from ₹369 Cr to ₹298 Cr — a 28.1% drop, indicating short-term margin pressure.

EPS: ₹74.6 — strong earnings base.

Return Metrics

ROCE: 33.7% and ROE: 25.2% — both excellent, showcasing efficient capital deployment and shareholder value creation.

Debt Profile

Debt-to-equity: 0.02 — virtually debt-free, enhancing financial flexibility.

Cash Flow: While not explicitly stated, strong returns and low debt imply healthy operating cash flows.

💹 Valuation Indicators

Metric Value Commentary

P/E Ratio 40.3 Premium vs. industry average (30.0) — reflects quality and growth expectations.

P/B Ratio ~9.07 Elevated, but justified by high ROE.

PEG Ratio 5.50 High — suggests valuation may be stretched relative to growth.

Intrinsic Value Likely below current price Due to recent earnings dip and rich valuation multiples.

🧠 Business Model & Competitive Advantage

Mphasis Ltd. is a global IT services firm with a sharp focus on digital transformation, cloud, and AI-driven solutions

Core Strategy: Its “Front2Back™ Transformation” model leverages cloud and cognitive technologies to deliver hyper-personalized digital experiences

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AI Integration: Mphasis.ai initiative embeds AI across its service stack — from predictive analytics to fraud detection and customer experience optimization

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Sector Focus

Strong presence in BFSI, logistics, and healthcare.

Deep partnerships with Fortune 500 clients, especially in North America and Europe

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Innovation Edge

Investments in quantum computing, metaverse applications, and cybersecurity.

Proprietary platforms and agile delivery models enhance scalability and speed.

Its competitive advantage lies in customer-centric design, AI-powered platforms, and domain specialization, positioning it as a premium player in the digital transformation space.

📈 Technical & Sentiment Signals

RSI: 63.0 — approaching overbought zone, short-term caution.

MACD: Strongly positive — bullish momentum.

Volume: Slightly above average — indicates steady investor interest.

DMA 50/200: Price above both — confirms long-term uptrend.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹2,750–₹2,850 — near DMA levels and below recent highs.

Long-Term View: Mphasis is a high-quality tech play with strong fundamentals, low debt, and deep client relationships. While valuation is rich, its innovation-led strategy and sector focus make it suitable for long-term holding. Dividend yield of 1.90% adds income stability.

Let me know if you'd like a peer comparison with LTIMindtree or Coforge to sharpen your view.

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www.mphasis.com

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www.swotanalysis.com

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canvasbusinessmodel.com

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