MPS Limited: Navigating Growth with AI and Strategic Consolidation in Q2 FY26

MPS Limited, a prominent player in the content and learning solutions space, has delivered a robust financial performance for the second quarter (Q2) and first half (H1) of fiscal year 2026. The company reported a consolidated revenue of INR 194.44 crore for Q2 FY26, marking a significant 9.42% year-on-year growth. This impressive top-line expansion was complemented by even stronger profitability, with Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) improving by 13.03% to INR 60.47 crore. Profit Before Tax (PBT) surged by 43.92% to INR 69.17 crore, while Profit After Tax (PAT) witnessed a remarkable 57.32% increase to INR 55.44 crore. These figures underscore MPS Limited's ability to drive both revenue growth and enhanced shareholder value through operational efficiencies and strategic initiatives.

The company's performance was primarily driven by healthy growth across its Research and Education verticals. The Research Solutions segment continues to be the dominant contributor, accounting for 61.5% of the total revenue in Q2 FY26, with revenue of INR 119.58 crore. This segment demonstrated an impressive 18.32% year-on-year organic growth (excluding AJE), reflecting deep engagement with STAR accounts and successful new customer acquisition. The Education Solutions segment emerged as a significant growth driver, expanding its contribution to 27.2% of total revenue, with INR 52.95 crore. This segment experienced a substantial 52.57% year-on-year revenue growth, fueled by a strong order pipeline and an expanding customer base. In contrast, the Corporate Learning segment's contribution moderated to 11.3% of total revenue, or INR 21.97 crore, in Q2 FY26, reflecting ongoing corporate restructuring efforts.

Financial Highlights: A Snapshot

Note: PBT for Q2FY26 includes net exceptional income of INR 12.81 crore (PY NIL). Total Cash and Cash equivalents (including investment in Mutual funds) as on 30-Sep-2025 are INR 117 Crores. The company has zero debt.

Strategic Imperatives and AI Integration

MPS Limited's strategic focus on AI-powered workflows and solutions is a key driver of its enhanced profitability. Management highlighted that over 60% of the growth in the Education business is now derived from AI-powered solutions, leading to a significant expansion in EBITDA margins for this segment, from 28.8% to 35.6% year-on-year. The company is committed to completely transitioning to AI-powered workflows, prioritizing agentic AI models, and scaling its proprietary platforms like DigiCore Pro. MPS Labs, the company's innovation hub, is actively growing its Data and AI practice, focusing on building robust data foundations for clients and leveraging AI agents in SaaS product development and content publishing workflows. This proactive approach to technology is not only enhancing internal efficiencies but also creating new revenue streams and future-proofing the business.

Corporate Learning Consolidation and Future Outlook

In a significant strategic move, MPS Limited has consolidated all its Corporate Learning business operations under MPS Interactive Systems (MPSi). This includes MPSi's complete acquisition of the remaining 35% stake in the Liberate Group (Australia) on October 28, 2025, making it a wholly-owned subsidiary. Additionally, MPS Europa AG is being integrated under MPSi. To ensure strategic continuity, Mr. Rodney Charles Beach, former promoter of Liberate Group, has subscribed to a minority equity stake in MPSi and was appointed President of the Corporate Learning segment, effective October 9, 2025. This consolidation aims to create a unified, globally competitive learning powerhouse, reduce duplication, streamline delivery, and foster cross-functional collaboration. While the Corporate Learning segment experienced softness in H1 FY26, management anticipates improved margin expansion in H2 FY26 and a return to revenue growth momentum from FY27.

Financial Discipline and Growth Pipeline

MPS Limited's financial discipline is evident in its debt-free balance sheet and strong cash position of INR 117 crore. The company has materially improved its Days Sales Outstanding (DSO) from 45 days in Q1 FY26 to 37 days in Q2 FY26, reflecting enhanced collection efficiency. Management articulated a clear capital allocation strategy, indicating comfort with INR 200 crore of debt capacity and a target to maintain INR 150 crore in cash, enabling INR 300-400 crore for acquisitions over the next 12-18 months. The company boasts a robust acquisition pipeline, with 25-35 targets under active consideration and 5 deals lined up, 1-2 of which are expected to close this fiscal year, primarily in the Education space. This strategic approach to growth, coupled with a balanced revenue mix and geographic diversification (growing traction in UK/Europe and Asia Pacific), positions MPS Limited for sustained long-term value creation.

MPS Limited's Q2 FY26 performance reflects a company executing with strategic clarity and disciplined efficiency. The strong financial results, driven by AI integration and a resilient business model, underscore management's ability to navigate market dynamics while pursuing an ambitious growth trajectory. The ongoing consolidation in Corporate Learning and a robust acquisition pipeline further reinforce the company's commitment to sustained growth and enhanced stakeholder value.