Coforge FY26 Q1 revenue beats Mphasis amid visa shift

Why this mid-cap IT ranking change matters

India’s mid-sized IT services segment has seen frequent churn over the last two years, with revenue rankings changing more often than at the top end of the sector. In the latest quarter, Coforge moved ahead of Mphasis to become India’s seventh-biggest IT services company by revenue. The change comes at a time when investors are also tracking regulatory and compliance risks, including U.S. visa rules, cross-border tax exposure, and client-driven contractual actions. In parallel, both companies have faced stock volatility linked to U.S. policy signals and company-specific developments.

Coforge edges past Mphasis in Q1 FY26

Coforge reported Q1 FY26 revenue of USD 442 million, which was stated as up 9.6%. That put it marginally ahead of Mphasis, which recorded USD 437 million in the same quarter. The gap is small, but it is meaningful in a segment where changes in large client spend or a single contract loss can shift quarterly rankings. The quarter also adds to a broader pattern of mid-cap IT reshuffling highlighted in the filing-based update.

Client concentration: Mphasis impacted after FedEx exit

The update also noted that Mphasis “took a hit” after losing FedEx as a client. FedEx was indicated to have contributed 8% of Mphasis’ income, underscoring how client concentration can quickly show up in financial comparisons between similarly sized IT firms. While no additional quarterly breakdown was provided, the mention frames why a narrow revenue lead can change hands when a large client relationship changes.

Visa rules in focus, but companies cite limited exposure

Alongside revenue rankings, IT companies addressed the impact of changed U.S. rules on staffing and visas. The update listed firms such as Mphasis, Persistent, Cyient, Coforge and Firstsource Solutions as seeing no material impact on financials because of a low dependence on H-1B visas. Companies said they do not foresee a significant hit to operations or financials under the new regime, based on their filing volumes and the composition of their U.S. workforce.

Mphasis: local hiring and AI-led deals, plus limited H-1B filings

Mphasis highlighted measures such as increased local hiring, acquisitions, partnerships, and a focus on AI-led deals to reduce reliance on overseas visas. It disclosed that as of June 30, 2025, it had 34,187 employees. On H-1B petitions, Mphasis said that in calendar year 2025 it had about 130 new filings, and had received 78 approvals to date. It added that it does not foresee any significant impact on financials or operations given its low H-1B filing volume and the share of overall U.S. employees on such visas.

Coforge: low fresh petitions and reduced reliance on H-1B staffing

Coforge disclosed that in FY25, it filed 65 new H-1B visa petitions, of which 63 were approved by USCIS. It also stated that it has consciously reduced reliance on new H-1B petitions for project staffing, reflected in the low number of fresh petitions filed in FY25. Based on this, Coforge said it does not see any major material impact on its financials due to changed regulations. As of FY25, Coforge had 33,497 employees, according to the disclosure.

Stock volatility: 26% U.S. tax on Indian imports

The filing-based summary also referenced a sharp market reaction on April 3, 2025, when Coforge’s stock fell 7% after the U.S. increased the tax on Indian goods. The new tax rate was stated as 26%. Coforge and Mphasis were described as being hit the hardest, with their stocks falling by up to 8%. The update framed the policy move as negative because the U.S. is a big market for Indian IT companies, which can make sentiment sensitive to U.S.-linked headlines even when direct revenue impacts are not quantified.

Tax and client-notice issues: Coforge disclosures investors track

Coforge also received an income tax demand from India’s Income Tax Department on March 28, 2025. The demand was for ₹1,849,806,803, including ₹484,659,591 as interest, and was linked to transfer pricing adjustments. The department’s position was that Coforge should have had a 32.5% profit margin instead of 11.6%, while Coforge disagreed with the demand.

Separately, a headline item referenced that Coforge received an 11 million notice for a data breach from a North American client (no further detail on the claim amount’s currency, timeline, or the nature of the incident was provided in the supplied text). Even without full particulars, such notices are typically monitored by investors because they can involve remediation costs, contractual offsets, or disputes over liability.

Legal backdrop: Mphasis arbitration-related dispute mentioned

The material also included excerpts from a legal dispute involving Mphasis Corporation (Delaware) and Mphasis Limited (India). Plaintiffs sought a declaration that an arbitration clause was unenforceable and requested an injunction against proceeding to arbitration. The excerpt stated that the plaintiff emailed a letter on October 11, 2024, giving written notice of intent to terminate SOW-2. It also stated the defendants argued termination was improper under the MSA because the letter did not set out specific grounds, and that the defendants filed an arbitration demand with the American Arbitration Association (AAA) on November 14, 2024 alleging multiple breaches of contract claims against Tabula.

Key figures at a glance

Market impact and what investors can infer from the disclosures

The ranking shift between Coforge and Mphasis is directly tied to quarterly revenue, with Coforge’s Q1 FY26 revenue narrowly ahead. The same set of disclosures also shows why investors track more than just topline numbers in mid-cap IT. Client concentration was highlighted through the reference to Mphasis losing FedEx, and compliance exposure surfaced through references to visa filings and transfer pricing.

On visas, both companies’ low H-1B filing counts and their own statements about limited impact suggest staffing strategies that rely less on incremental petition approvals. On sentiment, the April 2025 stock declines linked to the 26% U.S. tax on Indian imports show how macro policy headlines can pressure IT names even when company-specific impacts are not yet quantified.

Conclusion

Coforge overtaking Mphasis in Q1 FY26 revenue reflects the ongoing churn within India’s mid-sized IT segment, where quarterly execution and client changes can quickly alter rankings. At the same time, both companies have pointed to low H-1B dependence, while separate disclosures around tax demands, client notices, and legal proceedings add context for risk monitoring. Investors will likely continue to track future quarterly revenue comparisons, client additions or exits, and updates on regulatory, tax, and legal matters referenced in these filings.