Mphasis Q4 FY26: Nuvama raises target to ₹3,200

Why Mphasis is in focus

Mphasis Ltd is in focus after Nuvama Institutional Equities retained its ‘Buy’ rating and raised its target price following the company’s Q4 FY26 performance. The brokerage said the IT services firm delivered a steady quarter, with growth slightly ahead of expectations and margins holding firm. Nuvama revised its target price to ₹3,200 from ₹3,100. The call comes as investors track how quickly deal wins translate into reported revenue, especially after several quarters of strong bookings.

Q4 FY26 performance: growth ahead of estimate

Nuvama said revenue grew 2.5% in constant currency (CC) quarter-on-quarter and 7.1% CC year-on-year to $162 million. The brokerage noted this was slightly above its estimate of 2.3% CC QoQ growth. On profitability, EBIT margin expanded 20 basis points QoQ to 15.4%, which was in line with its estimate. In deal terms, total contract value (TCV) was described as stable at $107 million, down 5% QoQ but up 4% YoY.

Guidance and what management is aiming for

Nuvama said management has guided for high-single to low-double-digit growth in FY27. The brokerage linked this guidance to the company’s recent execution and deal momentum. It argued that after three quarters of strong deal wins, Mphasis has “finally delivered” on the revenue front with solid QoQ and YoY growth. Nuvama also pointed to the importance of a strong exit rate and record deal wins in FY26 as a platform for FY27.

Deal conversion: the core of Nuvama’s thesis

A key point in Nuvama’s note was that execution is now “catching up” with the deal pipeline. This framing matters because IT services valuations often hinge on confidence that order inflows will convert into revenue without margin erosion. Nuvama’s comments suggest it is looking for consistency in quarterly delivery rather than one-off upside. The fact that margins expanded while growth was slightly ahead of expectations supported that view.

Currency assumption change drives EPS upgrades

Nuvama said it has slightly upgraded its earnings estimates after updating its currency assumptions. The brokerage revised its USD/INR assumption to 93 from 88, and as a result raised its FY27E and FY28E EPS estimates by 2.9% and 3.4%, respectively. While the note does not quantify the new EPS numbers, the direction of change is clear: the estimate upgrades are tied to the currency assumption update rather than only operational performance.

Valuation: target based on FY28E multiples

Nuvama retained its positive stance on valuation and reiterated its Buy. It said the revised target price of ₹3,200 values the stock at 25x FY28E P/E. It also noted that the stock currently trades at 20x FY28E P/E. The valuation framing indicates that Nuvama expects scope for re-rating if execution remains steady and FY27 growth plays out in line with management’s guidance.

Stock move and market context

Mphasis shares settled 1.17% higher at ₹2,275 on Thursday, according to the update. Separately, the provided market snapshot shows a last close price of ₹2,331.80 along with a 5-day change of -3.69% and a 1st Jan change of -16.45%. Domestic benchmarks were closed on Friday due to ‘Maharashtra Day’, which can reduce immediate price discovery for broker-driven news flow.

Other brokerage views cited in the update

The broader set of brokerage references shows varied target prices and recent rating actions. Nomura was reported to have upgraded Mphasis to Buy from Neutral and adjusted its target to ₹2,630 from ₹2,970 (published 04/06/2026). ICICI Securities was listed as upgrading the stock to Buy from Add with a target of ₹2,500 (Mar. 16). Jefferies was listed as keeping a Buy while adjusting its target to ₹3,410 from ₹3,460 (Jan. 23). Motilal Oswal was also cited with a Buy and a target of ₹3,400, valuing the stock at 26x FY28E EPS.

Key numbers at a glance

Brokerage targets and rating signals (as cited)

Market impact and what to track next

For investors, the immediate market takeaway is that a large brokerage has raised its target after a quarter that combined modest growth upside with stable profitability. The operational data points to monitor are revenue conversion from deal wins and whether TCV sustains around the $100 million to $100 million quarterly range cited across updates. The financial sensitivities highlighted include currency assumptions, since Nuvama explicitly tied EPS estimate upgrades to a shift in USD/INR expectations. On valuation, the gap between Nuvama’s 25x FY28E framework and the cited current trading multiple of 20x FY28E is central to its upside case.

Conclusion

Nuvama’s updated view positions Mphasis as a steady execution story after Q4 FY26, backed by slightly better-than-expected CC growth, a marginal margin expansion, and stable TCV. The brokerage’s target revision to ₹3,200 and its EPS estimate upgrades were also linked to a higher USD/INR assumption. The next key reference points will be how FY27 growth guidance translates into quarterly performance and whether the pace of deal conversions remains consistent.