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INVESTMENT INSIGHTS

Check Before You Invest : Mphasis Ltd

BSE: 526299 NSE: MPHASIS ISIN: INE356A01018
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Mphasis Ltd belong to?
Mphasis Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Mphasis Ltd a good quality company?
Mphasis Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Mphasis Ltd undervalued or overvalued?
Mphasis Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is Mphasis Ltd a good buy now?
Mphasis Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Mphasis Ltd?
Mphasis Ltd revenue growth is 7.2% for FY-2025 , which is below its 5 year CAGR of 10% , indicating slower growth.
Q.2 Gross Profit margin of Mphasis Ltd?
Mphasis Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.2% for FY-2025 , which is above its 5 year median of 18.7% , indicating increasing margins.
Q.3 Operating Profit Margin of Mphasis Ltd?
Mphasis Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 18.6% for FY-2025 , which is above its 5 year median of 17.7% indicating increasing margins.
Q.4 Net Profit Margin of Mphasis Ltd?
Mphasis Ltd Net Profit Margin is 11.96% for FY-2025 , is in line with with its 5 year median of 11.96%, indicating stable margins.
Current Level Historic Median
Gross Profit Margin 19.2 18.7
Operating Profit Margin 18.6 17.7
Net Profit Margin 11.96 11.96
Q.5 Return on Asset of Mphasis Ltd?
Mphasis Ltd Return on Asset is 11.98(x), which is below its 5 year historical median of 13.66(x), indicating deteriorated asset utilization efficiency.
Q.6 Return on Equity (ROE) of Mphasis Ltd?
Mphasis Ltd Return on equity is 18.98% for FY-2025 , which is below its historical median of 19.88%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Mphasis Ltd?
Mphasis Ltd Return on capital employed is 23.01% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Mphasis Ltd?
Mphasis Ltd Cash conversion cycle is 31 , above its historical median of 27 , indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1 1.09
ROE 18.98 19.88
ROCE 23.01 25.21
Cash Conversion Cycle 31 27
Q.9 Debt to Equity ratio of Mphasis Ltd?
Mphasis Ltd Debt-to-Equity ratio is 0.12 , which is above with the industry average of 0.04 , indicating higher debt levels in the industry.
Q.10 Debt to cash flow from operations of Mphasis Ltd?
Mphasis Ltd Debt to cash flow from operations is 0.59 , which is at a healthy level, indicating the business is able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Mphasis Ltd?
Promoters hold 30.59% of the Mphasis Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Mphasis Ltd vs industry peers?
Mphasis Ltd revenue CAGR is 9.98% , compared to the industry median CAGR of 18.87% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 14,230 8,415.1
Gross Profit 2,732.2 2,014.1
Operating Profit 2,647 1,882.5
Net Profit 1,702 1,238
Operating Efficiency
Current Level Industry Median
Asset Turnover 1 1.26
ROE 18.98 26.06
ROCE 23.01 33.58
Cash Conversion Cycle 30.82 44

Valuation & price assessment

Q.1 Stock return of Mphasis Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 16.8% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 16.8% 6.6% 9.3% 7.2%
Q.3 Valuation ratios of Mphasis Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 24.56 18.45 22.96
Price to Book 4.39 3.65 2.61
Price to Sales 2.88 2.44 4.40
EV to EBITDA 13.87 11.59 17.20

Check more companies

1. Persistent Systems
2. Oracle Finl. Service
3. Mphasis
4. Coforge
5. L&T Technology Serv.
6. Hexaware Tech.
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