Strong deal pipeline gives little comfort to investors of Mphasis

Mid-tier information technology (IT) services company Mphasis Ltd has entered the new financial year with a solid deal pipeline. At the end of FY21, its order book stood at a record high of $1.11 billion, up 51% year-on-year (y-o-y). The net new total contract value in its key direct channel business stood at $275 million, up 21% y-o-y.

It should be noted that the size of deal wins has doubled compared to the year-ago period. The deal tenure has also increased. In Q1FY22, Mphasis won its largest deal ever of $250 million, which is likely to generate revenue from Q2FY22. While the deal ramp is gradual, it will start from Q3FY22 and continue beyond FY22, the company’s management said in a post-earnings conference call.