Mphasis direct revenue rises 11.3% on broad Q2FY27 growth

Mphasis reported 11.3% year-on-year and 3.5% quarter-on-quarter direct revenue growth in constant currency in Q2FY27, reaching US$48.6 crore from US$44.5 crore a year earlier. Growth included Banking & Financial Services, technology, media and telecommunications, applications, business process outsourcing, the Americas and Rest of World.

How did Mphasis direct revenue perform in Q2FY27?

Mphasis delivered 11.3% year-on-year and 3.5% quarter-on-quarter direct revenue growth in constant currency in Q2FY27. Reported direct revenue was US$48.6 crore at the average US dollar to Indian rupee rate for the period, up US$4.1 crore from Q2FY26 and US$1.5 crore from Q1FY27. Mphasis separately reported gross revenue growth of 3.3% in constant currency for the quarter.

Mphasis's gains were not uniform across the reported service segments. APPS rose US$1.2 crore sequentially to US$36.8 crore, while BPO increased US$0.5 crore to US$7.9 crore. ITO declined US$0.2 crore from Q1FY27 and US$1.3 crore from Q2FY26 to US$3.9 crore. Mphasis attributed APPS and BPO growth to AI-led modernization deals and new deal wins.

Which geographies and service segments drove Mphasis growth?

The Americas and Rest of World drove Mphasis's sequential geographical growth in Q2FY27, while Europe, Middle East and Africa (EMEA) declined. Americas revenue rose 3.1% quarter on quarter to US$41.3 crore, accounting for US$1.1 crore of the US$1.5 crore sequential increase in total direct revenue. Rest of World increased 16.4% to US$3.6 crore, while EMEA fell 3.3% to US$3.7 crore.

Rest of World recorded the fastest year-on-year regional increase, at 23.5%, followed by 12.4% in the Americas; EMEA was down 9.0%. The Americas remained the largest reported geography at US$41.3 crore in Q2FY27, compared with US$3.7 crore in EMEA and US$3.6 crore in Rest of World. This means the Americas supplied the largest absolute increase, while Rest of World supplied the highest percentage growth.

Mphasis said Mphasis Tria-led process-modernization deals were emerging as a theme for business reimagination, supporting pipeline and wins in APPS and BPO. The company said 71% of its Q2FY27 pipeline was AI-led, while quarterly total contract value (TCV) wins were US$46.6 crore and 66% of those wins were AI-led. These figures identify the deal activity management linked to the two expanding service segments, rather than quantify revenue from Mphasis Tria.

Which Mphasis industry verticals grew in Q2FY27?

Banking & Financial Services (BFS) and technology, media and telecommunications (TMT) both expanded sequentially and year on year in Q2FY27. BFS revenue rose 4.5% quarter on quarter to US$25.9 crore and 15.0% year on year from US$22.8 crore. TMT increased 10.9% sequentially to US$9.4 crore and 14.5% year on year from US$8.6 crore; Mphasis attributed TMT growth to ramp-ups in new deal wins.

Insurance also increased to US$7.1 crore in Q2FY27 from US$7 crore in Q1FY27 and US$6.2 crore in Q2FY26, producing 14.7% year-on-year growth. Mphasis said BFS had delivered 3.8% compounded quarterly growth over the preceding eight quarters, driven by continued wallet-share gains and new deal wins. BFS therefore grew faster year on year than total direct revenue's 11.3% rate.

Logistics and Transportation moved in the opposite direction, declining to US$1.8 crore in Q2FY27 from US$2 crore in Q1FY27 and US$2.5 crore in Q2FY26. That represented falls of 12.0% sequentially and 27.8% year on year. The Others category fell 6.4% sequentially to US$4.4 crore but was 1.8% above Q2FY26, with Mphasis identifying healthcare as a growth driver within the category.

Did Mphasis growth extend across its client base?

Mphasis reported year-on-year growth in both its largest clients and its next-largest client cohort in Q2FY27. Clients ranked one to five by trailing-12-month revenue grew 15.1%, clients ranked one to 10 grew 13.0%, and clients ranked 11 to 20 grew 22.7%. The trailing-12-month ranking means these measures do not represent revenue earned only during Q2FY27.

The number of clients generating more than US$5 crore rose to nine in Q2FY27 from seven in both Q2FY26 and Q1FY27. Clients above US$0.5 crore increased to 55 from 50 a year earlier and 52 in the preceding quarter, while the number above US$0.1 crore reached 139, compared with 136 in Q2FY26 and 133 in Q1FY27. These are overlapping revenue thresholds, so they show movement across several bands rather than separate client groups.

There were offsets within the client pyramid. Mphasis had 14 clients above US$2 crore in Q2FY27, down from 15 in Q1FY27 but above 11 a year earlier, while the count above US$1 crore was 28, compared with 30 in both reference periods. Mphasis reported two year-on-year and two sequential additions in the above-US$5-crore band, alongside reductions of two in the above-US$1-crore band on both comparisons.

Conclusion

Mphasis combined 11.3% year-on-year constant-currency direct revenue growth in Q2FY27 with expansion in its largest geography, the Americas, and in Rest of World. BFS, Insurance, TMT, APPS and BPO all rose, while clients ranked one to five and 11 to 20 grew 15.1% and 22.7% year on year, respectively. EMEA, ITO and Logistics and Transportation were the reported exceptions.

The next disclosed measure to watch is backlog conversion into revenue. Mphasis said backlog built in prior quarters supports in-quarter and near-term revenue conversion, after reporting Q2FY27 TCV wins of US$46.6 crore, five large deals, trailing-12-month TCV of US$180 crore and a pipeline that was 71% AI-led. The presentation did not provide a future revenue target or a date for that conversion.