⚠ 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: 3.8
| Stock Code | MPHASIS | Market Cap | 40,422 Cr. | Current Price | 2,118 ₹ | High / Low | 3,037 ₹ |
| Stock P/E | 28.4 | Book Value | 307 ₹ | Dividend Yield | 2.69 % | ROCE | 33.7 % |
| ROE | 25.2 % | Face Value | 10.0 ₹ | DMA 50 | 2,446 ₹ | DMA 200 | 2,658 ₹ |
| Chg in FII Hold | 1.27 % | Chg in DII Hold | 8.18 % | PAT Qtr | 364 Cr. | PAT Prev Qtr | 393 Cr. |
| RSI | 27.7 | MACD | -121 | Volume | 8,42,701 | Avg Vol 1Wk | 5,11,898 |
| Low price | 2,025 ₹ | High price | 3,037 ₹ | PEG Ratio | 3.99 | Debt to equity | 0.09 |
| 52w Index | 9.19 % | Qtr Profit Var | -3.19 % | EPS | 73.6 ₹ | Industry PE | 20.9 |
📊 Financials
- Revenue & Profitability: PAT declined from ₹393 Cr. to ₹364 Cr. (-3.19%), showing short-term weakness. EPS at ₹73.6 remains strong.
- Margins & Returns: ROCE (33.7%) and ROE (25.2%) highlight excellent efficiency and profitability.
- Debt: Very low debt-to-equity ratio (0.09), ensuring financial stability.
- Cash Flow: Healthy due to strong profitability and minimal leverage.
💹 Valuation
- P/E Ratio: 28.4 vs Industry PE of 20.9 → Slightly overvalued compared to peers.
- P/B Ratio: ~6.9 (Price ₹2,118 / Book Value ₹307) → Premium valuation.
- PEG Ratio: 3.99 → Growth does not fully justify valuation.
- Intrinsic Value: Current price trades above fair value estimates, limiting upside.
🏢 Business Model & Competitive Advantage
- Mphasis operates in IT services, focusing on digital transformation, cloud, and application services.
- Competitive advantage lies in niche expertise, strong client relationships, and global delivery capabilities.
- Dividend yield of 2.69% provides attractive shareholder returns compared to peers.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹2,000–2,100 range (close to 52W low of ₹2,025 and RSI oversold at 27.7).
- Long-Term Holding: Suitable for long-term investors seeking exposure to IT services growth. Accumulation at lower valuations is recommended.
✅ Positive
- Strong ROCE and ROE indicate efficient capital use.
- Low debt ensures financial safety.
- Dividend yield of 2.69% supports investor confidence.
- FII (+1.27%) and DII (+8.18%) holdings increased, showing institutional support.
⚠️ Limitation
- Valuation multiples (P/E, P/B, PEG) are higher than industry averages.
- Quarterly profit decline (-3.19%) signals near-term weakness.
📉 Company Negative News
- PAT declined sequentially from ₹393 Cr. to ₹364 Cr.
- MACD at -121 and RSI at 27.7 indicate bearish technical momentum.
📈 Company Positive News
- Strong institutional buying (DII +8.18%, FII +1.27%).
- Dividend yield higher than many IT peers.
- Long-term efficiency metrics remain robust despite short-term profit dip.
🏭 Industry
- IT services industry is globally competitive, driven by digital transformation and outsourcing demand.
- Industry PE at 20.9 suggests peers trade at more reasonable valuations.
🔎 Conclusion
- Mphasis is fundamentally strong with excellent return ratios, low debt, and attractive dividend yield.
- However, valuations are stretched, and near-term profit weakness limits upside.
- Best strategy: Accumulate near ₹2,000–2,100 range for long-term holding, while avoiding aggressive buying at current levels.