Coforge vs Mphasis (2026): AI Deals, BFSI, Margins & Which Is Better?
Coforge and Mphasis both want investors to see them as AI-led technology companies. The harder question is what sits underneath the AI label.
Coforge has transformed itself through Encora into a much larger engineering, cloud and data platform.
Mphasis remains far more concentrated in financial services, but its Direct business is reaccelerating and 63% of Q1 deal wins were AI-led.
One is growing much faster on reported numbers.
The other trades at almost half the earnings multiple.
Question 1: How much of the growth is coming from the existing business?
This is the first question because the headline percentages are not comparable.
Coforge reported Q1 revenue of $592.2 million, up 33% year on year in dollars and 49% in rupees.
That is extraordinary growth.
But Encora was consolidated from May 1, 2026.
Q1 therefore contains two months of Encora revenue that did not exist in the prior-year Coforge base.
Mphasis reported approximately $471 million of Q1 revenue and 8.3% year-on-year constant-currency growth.
Its Direct business grew 9.9% in constant currency.
The correct interpretation is not “Coforge organically grows four times faster.”
The correct interpretation is that Coforge is now operating at a much larger post-acquisition scale while Mphasis is showing a cleaner single-company recovery.
Start with the operating ledger
| Q1 FY2027 Metric | Coforge | Mphasis | What It Means |
|---|---|---|---|
| Revenue | $592.2 Mn / ₹5,528 Cr | ~$471 Mn / ₹4,384 Cr | Coforge larger |
| Reported INR growth | 49% | 17.46% | Coforge acquisition-assisted |
| USD / CC growth | 33% USD | 8.3% CC | Not directly comparable |
| Direct revenue CC growth | Not equivalent disclosure | 9.9% | Mphasis organic indicator |
| EBIT / operating margin | 16.0% | 14.8% | Coforge |
| EBITDA margin | 20.3% | ~18.1% | Coforge |
| Q1 PAT | ₹519 Cr | ₹490 Cr | Coforge slightly |
| PAT growth | 110% YoY INR | 10.82% YoY | Coforge |
| Q1 TCV | $691 Mn | $461 Mn net new | Coforge absolute |
| AI-led share of TCV | Different disclosure | 63% | Mphasis transparency |
| Next 12-month signed order book | $2.23 Bn | Pipeline disclosed rather than identical executable book | Coforge |
| Pipeline trend | Strong large-deal pipeline | +8% QoQ, +28% YoY | Mphasis measurable acceleration |
| ROCE, Bull Run | 20.05% | 24.41% | Mphasis |
| ROE, Bull Run | 19.68% | 18.29% | Coforge slightly |
| 5-year sales growth | 28.60% | 10.31% | Coforge |
| 5-year profit growth | 28.01% | 8.89% | Coforge |
| P/E | 39.56x | 23.38x | Mphasis |
| P/B | 7.12x | 4.16x | Mphasis |
| Dividend yield | 0.99% | 2.65% | Mphasis |
| Bull Run Score | 69.2/100 | 46.0/100 | Coforge |
Coforge's Q1 jump still matters even after adjusting mentally for Encora
An acquisition can create low-quality growth, but Q1 does not look like that so far.
EBITDA increased 74% in rupees.
EBIT increased 101%.
PAT increased 110%.
EBIT margin expanded to 16%.
If Coforge had merely purchased revenue without integrating costs effectively, profitability would normally weaken during the first consolidated quarter.
Instead, reported margin expanded substantially.
The more useful Coforge number is $2.23 billion, not 49%
The next-12-month signed order book reached approximately $2.23 billion.
That was 27% higher sequentially and 44% higher year on year.
Order intake during Q1 was $691 million.
Four large deals were signed.
The order book provides forward visibility after the initial acquisition step-up disappears from year-on-year comparisons.
If Coforge can continue growing the executable book after Encora is fully present in the comparison base, the acquisition thesis becomes much stronger.
Question 2: Which company has the stronger deal funnel?
Coforge has more absolute contracted visibility. Mphasis has a surprisingly strong AI-led funnel relative to its size.
Mphasis reported $461 million of net-new TCV in Q1.
This was the fifth consecutive quarter above $400 million.
Three large deals were signed, including one above $100 million.
Trailing-twelve-month TCV exceeded $1.8 billion.
The pipeline increased 8% sequentially and 28% year on year.
Large-deal pipeline increased approximately 10% sequentially.
The Mphasis pipeline is broadening beyond its traditional base
Management said non-BFS pipeline increased approximately 18% sequentially.
That is strategically important because financial services already represents a very large portion of company revenue.
Mphasis does not need to abandon BFSI.
It needs to prevent BFSI expertise from becoming an excessive concentration.
Growing technology, retail, logistics and other verticals can improve resilience while preserving the company's strongest domain franchise.
Approximately two-thirds of Mphasis Q1 revenue still came from BFS and Insurance
Banking and Financial Services contributed about $248 million.
Insurance contributed approximately $70 million.
Combined, that is roughly $318 million against total revenue of about $471 million, or approximately 67.5%.
This concentration explains both the strength and weakness of the Mphasis model.
When US banks, wealth firms, insurers and financial platforms increase technology spending, Mphasis can grow quickly because it understands the domain deeply.
When financial-services discretionary budgets weaken, the impact is difficult to diversify away.
BFS itself is currently healthy
Mphasis said Direct BFS revenue grew approximately 9.4% year on year in constant currency.
The business has produced sustained quarterly growth over several periods.
Insurance remained strongly positive year on year despite a sequential decline following project milestones.
TMT was particularly strong in Q1 as recently signed deals ramped.
The concentration therefore is a risk characteristic, not evidence that the core franchise is weakening.
Coforge's portfolio has moved in the opposite direction
The Encora acquisition deliberately broadened Coforge beyond its historical insurance, travel and financial-services specialisations.
Encora added meaningful Hi-Tech and Healthcare scale.
It also added Latin American engineering talent and Silicon Valley product-engineering relationships.
This makes Coforge less dependent on a small set of hyperspecialised industries than it was several years ago.
Question 3: Which AI story is actually measurable?
Both, but in different ways.
Coforge says approximately 86% of revenue now comes from AI-led engineering, data and cloud services.
Mphasis says 63% of Q1 net-new TCV was AI-led.
Mphasis also said roughly 70% of its current pipeline was AI-led.
These are not the same metric.
Coforge is describing revenue mix.
Mphasis is describing new demand and pipeline composition.
Coforge is trying to industrialise AI around vertical platforms
The company is building beyond generic copilots.
Nuuron is positioned as an AI operating system that connects enterprise knowledge, decision intelligence, agents and execution systems.
NEXA targets insurance workflows.
Aeronova.AI targets airline retailing transformation.
Coforge's thesis is that industry-specific platforms plus engineering talent can produce outcome-based commercial models rather than simply billing AI developers by the hour.
Mphasis frames the problem as an “agency gap”
Its argument is that enterprises already have access to powerful AI models but struggle to turn them into governed decision systems that understand company-specific context.
Mphasis is focusing on enterprise modernisation, data, applications, operations and business processes where AI agents need to work inside existing systems.
Q1 Direct enterprise-applications revenue grew strongly.
BPO also accelerated as AI-led proposals converted.
This is a more specialised enterprise-transformation thesis than simply saying “AI demand is strong.”
The strongest Mphasis AI statistic is 63% of TCV
More than three-fifths of new Q1 deal wins were classified as AI-led.
That matters because TCV is future work rather than marketing pipeline alone.
The company also has a record pipeline where approximately 70% is AI-led.
The next test is whether this mix lifts company growth without depressing margin through heavy implementation investment.
Coforge's AI number has a different test
If 86% of revenue already comes from AI-led engineering, data and cloud, AI should now be visible in company-wide margin and growth rather than treated as future optionality.
Q1 supports that argument.
Revenue expanded dramatically.
EBIT margin rose to 16%.
EBIT more than doubled.
But the acquisition makes it difficult to isolate how much of the improvement came from AI productivity versus acquired business mix and cost synergies.
Question 4: Which company is taking more balance-sheet risk?
Coforge, by a wide margin after Encora.
Coforge financed part of Encora through a $550 million three-year loan at a 4.6% fixed rate.
It also issued substantial new equity to Encora shareholders.
The combined structure gives Coforge far greater scale, but it has made capital allocation a major part of the equity story.
Debt repayment and per-share earnings now matter almost as much as revenue growth.
The Encora deal means Coforge should no longer be analysed as a pure asset-light IT compounder
It remains an asset-light services business operationally, but the acquisition financing introduces financial obligations that did not exist at the same scale before.
Investors should monitor interest expense, cash generation, debt repayment and whether acquisition synergies produce enough incremental EBIT to offset the financing cost.
The Bull Run debt-to-equity field alone is not used to judge this issue because acquisition financing and equity issuance need to be understood from the transaction structure itself.
Mphasis's balance sheet is less transformational
Bull Run records debt-to-equity around 0.17.
Interest coverage remains above 13x.
Mphasis has made acquisitions, including Theory and Practice, but nothing currently changes the company's financial structure on the scale of Encora.
This gives Mphasis greater balance-sheet simplicity.
The trade-off is slower growth.
Theory and Practice is affecting Mphasis margin before producing full scale benefits
Mphasis Q1 operating margin declined to approximately 14.8% from 15.4% in the previous quarter.
Gross margin also declined.
Acquisition-related costs and growth investments contributed to pressure.
Management nevertheless maintained FY2027 operating-margin guidance of 14.75%-15.75%.
This tells investors that Mphasis is accepting near-term margin investment to accelerate growth rather than targeting Coforge-like 20%-plus EBITDA immediately.
Coforge is already above Mphasis's current EBIT range
Coforge EBIT margin was 16.0%.
Mphasis operating margin was 14.8%.
The 120-basis-point difference is meaningful.
Coforge also reported 20.3% EBITDA margin.
Its acquisition integration therefore has not prevented strong consolidated profitability so far.
Question 5: How much growth is already priced into each stock?
This is where Mphasis becomes much more competitive.
Coforge traded around 39.6x trailing earnings in Bull Run's August 25 snapshot.
Mphasis traded around 23.4x.
Coforge P/B was approximately 7.1x.
Mphasis was around 4.2x.
The valuation gap is large enough that Mphasis does not need to match Coforge's growth rate to produce competitive shareholder returns.
Mphasis also has the higher current ROCE
Bull Run records Mphasis ROCE around 24.4% versus Coforge around 20.0%.
ROE is closer, with Coforge at approximately 19.7% and Mphasis at 18.3%.
Mphasis therefore generates respectable returns despite trading at a much lower valuation.
Coforge needs Encora synergies and continued growth to lift return on the larger capital base.
The long-term growth record strongly favours Coforge
Five-year sales growth is approximately 28.6% for Coforge versus 10.3% for Mphasis.
Five-year profit growth is approximately 28.0% versus 8.9%.
This is why Coforge commands a premium.
The market is not valuing only one quarter of acquisition growth.
Coforge has already spent years growing faster than Mphasis.
Mphasis's lower multiple is therefore not a free bargain
A 23x P/E can remain 23x if the company grows only high single digit while faster peers compound above 15%.
The Mphasis rerating case needs:
- Direct revenue growth remaining around double digit.
- AI-led TCV converting into reported revenue.
- Margins holding inside guidance.
- Non-BFS revenue broadening.
- Pipeline acceleration producing sustained EPS growth.
Coforge's premium has its own hurdle
A 40x multiple after a major acquisition means investors expect both integration and growth to go right.
Coforge must:
- Keep the $2.23 billion executable order book growing.
- Sustain 16% or better EBIT margin.
- Grow acquired Encora accounts.
- Repay acquisition debt.
- Produce strong EPS after equity dilution.
- Maintain client retention after integration.
The market has already rewarded Coforge far more aggressively
| Market Metric | Coforge | Mphasis |
|---|---|---|
| Price on 25 Aug 2026 | ₹1,892.80 | ₹2,431.90 |
| Market capitalisation | ₹67,910 Cr | ₹44,659 Cr |
| 1-month return | +27.49% | +6.28% |
| 3-month return | +36.33% | +8.91% |
| 6-month return | +57.68% | +7.53% |
| 1-year return | +7.30% | -16.65% |
| 52-week high | ₹1,989.70 | ₹3,037.20 |
| 52-week low | ₹1,008.10 | ₹2,013.00 |
| RSI (14) | 71.11 | 56.94 |
Coforge has risen nearly 58% over six months and is close to its 52-week high.
Mphasis remains below its 200-day moving average and is down more than 16% over one year.
The market is therefore already assigning a significant premium to Coforge's execution and Encora integration.
The decision ledger
Coforge currently offers
- Faster reported growth.
- 16% EBIT margin.
- $2.23 Bn signed next-12-month book.
- Broader engineering exposure after Encora.
- Strong Hi-Tech and Healthcare expansion.
- Exceptional recent stock momentum.
- Much stronger five-year growth.
Mphasis currently offers
- Cleaner organic Q1 growth comparison.
- 9.9% Direct CC growth.
- $461 Mn net-new TCV.
- 63% AI-led deal mix.
- Record pipeline growth.
- Higher ROCE.
- Much lower P/E and P/B.
- Higher dividend yield.
The most important risk is different for each company
Coforge's primary risk is integration and valuation. Mphasis's primary risk is concentration and growth durability.
Coforge needs an enormous acquisition to create value per share, not merely company scale.
Mphasis needs an AI-led sales pipeline to broaden a business where roughly two-thirds of quarterly revenue still comes from Banking, Financial Services and Insurance.
Both risks are measurable over the next several quarters.
Coforge vs Mphasis: the verdict depends on how much execution risk you want to pay for
Coforge is clearly the stronger growth franchise today.
Its order visibility, margin expansion and five-year growth record are superior.
Encora has also made the company strategically broader and more relevant to AI-led engineering, data and cloud workloads.
Mphasis is not trying to win the same argument on scale.
Its case is that Direct growth is moving toward double digits, AI is already 63% of new deal wins, pipeline growth is accelerating and the stock trades at only around 23x earnings.
Coforge vs Mphasis FAQs
Which company is larger by Q1 revenue?
Coforge, at approximately ₹5,528 crore versus Mphasis at ₹4,384 crore.
Which grew faster?
Coforge on reported numbers, although Q1 includes Encora from May 1. Mphasis reported 8.3% constant-currency growth and 9.9% Direct CC growth.
Which has the higher margin?
Coforge, with a 16.0% EBIT margin versus Mphasis operating margin of 14.8%.
Which has more Q1 TCV?
Coforge reported approximately $691 million of order intake versus Mphasis at $461 million of net-new TCV.
Which has more visible AI-led deal activity?
Mphasis provides a clean deal metric: 63% of Q1 TCV was AI-led and approximately 70% of pipeline was AI-led. Coforge instead says approximately 86% of current revenue comes from AI-led engineering, data and cloud services.
Which is more concentrated in BFSI?
Mphasis. Banking and Financial Services plus Insurance contributed roughly 67.5% of Q1 revenue.
Which has better ROCE?
Mphasis in Bull Run's current standardised snapshot, at approximately 24.4% versus Coforge around 20.0%.
Which is cheaper?
Mphasis, at approximately 23.4x P/E and 4.2x P/B versus Coforge at roughly 39.6x and 7.1x.
Research sources
Disclaimer
This comparison is educational and informational only. Coforge's Q1 FY2027 headline growth includes Encora consolidation from May 1, 2026, and therefore should not be interpreted as directly comparable organic growth against Mphasis. Coforge order intake and Mphasis net-new TCV are separately defined company measures. The estimated Mphasis BFSI concentration is derived from disclosed Q1 Banking and Financial Services revenue plus Insurance revenue divided by total Q1 revenue. AI-led classifications are company-defined and are not standardised across vendors. Financial metrics, exchange rates, acquisition costs and market prices change over time. Nothing here recommends buying, selling or holding Coforge, Mphasis or any other security. Bull Run is not a SEBI-registered Research Analyst or Investment Adviser.