MPHASIS - Investment Analysis

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

Investment Rating: 3.7

💻 Fundamental Analysis: Mphasis Ltd. (MPHASIS)

Mphasis is a mid-tier IT services company with strong capabilities in cloud, digital, and cognitive services. It has solid fundamentals, but valuation and growth metrics suggest a cautious accumulation strategy.

Metric Value Implication

Market Cap ₹52,798 Cr. Large-cap; stable presence in IT services

Stock P/E 30.4 Slightly above industry PE of 29.1 — fair valuation

PEG Ratio 5.36 High — indicates overvaluation relative to earnings growth

ROE / ROCE 18.2% / 22.7% Strong — efficient capital deployment

Dividend Yield 2.05% Attractive — good for long-term income

Debt-to-Equity 0.12 Low — financially sound

EPS ₹91.6 Strong earnings base

Profit Growth (QoQ) +9.19% Stable — consistent performance

📉 Technical & Trend Analysis

Current Price: ₹2,774

DMA 50 / DMA 200: ₹2,716 / ₹2,664 — trading above both, short-term bullish

RSI: 51.1 — neutral zone

MACD: -5.68 — mild bearish divergence

Volume: Below average — reduced trading interest

✅ Is It a Good Long-Term Investment?

Yes, selectively. Mphasis has strong ROE/ROCE and a healthy dividend yield, making it a decent long-term candidate. However, the high PEG ratio suggests that the stock is priced for aggressive growth, which may not be fully backed by current earnings momentum.

🎯 Ideal Entry Price Zone

Buy Zone: ₹2,500–₹2,650

Near 200 DMA and historical support

Accumulate gradually if PEG drops below 3.5 and profit growth accelerates

Ideal for long-term investors seeking stable IT exposure with income potential

🧭 Exit Strategy / Holding Period (If Already Holding)

If you're already invested

Holding Period: 3–5 years — to benefit from digital transformation tailwinds

Exit Strategy

Partial Exit near ₹3,200–₹3,250 if valuation stretches (P/E > 35)

Hold if ROE stays above 18% and PAT growth remains consistent

Reassess if PEG remains above 5 or FII selling accelerates

Would you like a comparison with peers like LTIMindtree, Coforge, or Persistent Systems to explore better growth-to-valuation ratios in mid-cap IT?

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