The easiest mistake in this comparison is to say:

Mphasis = BFSI and Tech Mahindra = telecom.

That is directionally true.

It is no longer sufficient.

Mphasis is diversifying beyond its traditional banking base, while Tech Mahindra's manufacturing, BFSI, healthcare and retail businesses are increasingly important to consolidated growth.

For underlying Bull Run stock data, see Mphasis and Tech Mahindra.

Q1 FY27 operating comparison

The biggest difference is concentration

This is not a perfect apples-to-apples comparison because Mphasis's 69% figure combines two separately reported segments.

Tech Mahindra reports Communications as one vertical.

The purpose is to show the difference in dependency.

Mphasis's financial-services concentration is roughly twice Tech Mahindra's telecom concentration

Mphasis remains deeply tied to:

• banks,
• capital-markets firms,
• lenders,
• payments businesses,
• insurance companies.

This specialisation can generate strong domain credibility.

It also means a simultaneous slowdown across financial-services technology budgets can affect a large part of consolidated revenue.

Specialisation has real commercial benefits

Banks do not buy technology in exactly the same way as manufacturers or telecom companies.

Financial institutions need deep expertise in:

• payments,
• risk,
• fraud,
• regulatory compliance,
• core banking,
• lending platforms,
• insurance claims,
• data governance.

Mphasis has spent decades building these capabilities.

That can create higher client intimacy and better cross-selling.

The current BFSI cycle is helping Mphasis rather than hurting it

Mphasis reported:

• 8.3% consolidated YoY CC growth,
• 9.9% Direct YoY CC growth,
• strong BFS Direct growth,
• strong Insurance annual growth.

The company's financial-services exposure is therefore currently acting as a growth engine.

Tech Mahindra's communications concentration has fallen in importance

Communications is still Tech Mahindra's largest vertical.

But it is no longer the only meaningful determinant of group performance.

Manufacturing was the real Q1 growth engine

Manufacturing grew approximately:

17.2% year on year.

Sequential growth was around:

9.0%.

This was substantially stronger than communications.

European automotive, aerospace and engineering-related work contributed to the momentum.

This changes the Tech Mahindra thesis

The old thesis was:

telecom recovers → Tech Mahindra recovers.

The current thesis is broader:

manufacturing + BFSI + healthcare + retail growth can support the company while telecom recovers gradually.

That makes the turnaround more resilient.

Communications is still strategically valuable

Telecom operators are investing in:

• network automation,
• cloudification,
• AIOps,
• 5G monetisation,
• customer-service AI,
• network digital twins,
• service assurance.

Tech Mahindra's legacy domain knowledge gives it an advantage when those programmes scale.

Growth currently favours Mphasis on an annual basis

Mphasis:

• 8.3% YoY CC,
• 2.1% QoQ CC.

Tech Mahindra:

• 6.6% YoY CC,
• 2.6% QoQ CC.

Mphasis therefore leads on year-on-year growth.

Tech Mahindra leads slightly on sequential momentum.

Mphasis expects further acceleration

Management retained FY27 constant-currency growth expectations of:

high single digits to low double digits.

It also indicated Q2 could deliver the strongest sequential CC growth in roughly three years.

If that occurs, Mphasis could widen its current annual growth advantage.

Tech Mahindra's recovery is broader than one quarter

Q1 new-deal TCV reached:

$1.078 billion.

That was the third consecutive quarter above $1 billion.

This consistency matters because it suggests the sales recovery is becoming institutional rather than depending on a single exceptional quarter.

Mphasis's booking record is equally consistent relative to size

Mphasis reported:

$461 million of net-new TCV.

Q1 was the fifth consecutive quarter above $400 million.

Its trailing-12-month TCV exceeded $1.8 billion.

For a company generating only around $471 million of quarterly revenue, that is meaningful sales intensity.

Absolute deal scale strongly favours Tech Mahindra

$1.078 billion is more than twice Mphasis's $461 million.

But Tech Mahindra is also around 3.5 times larger by quarterly revenue.

Mphasis therefore remains competitive when bookings are viewed relative to current size.

Do not compare the deal figures as identical definitions

Mphasis describes its metric as net-new TCV.

Tech Mahindra reports new-deal wins TCV.

Company methodologies can differ around:

• renewals,
• extensions,
• variable scope,
• multi-year commitments.

The safest conclusions are about direction and scale, not false precision.

AI is unusually visible in Mphasis's sales funnel

Mphasis said:

63% of Q1 TCV was AI-led.

The company also indicated approximately:

70% of its pipeline was AI-led.

This gives investors a measurable view of how quickly AI has entered its commercial funnel.

But AI-led TCV is not AI revenue

A contract classified as AI-led can include:

• cloud work,
• data engineering,
• application modernisation,
• consulting,
• platform integration.

The full TCV should not automatically be labelled pure AI revenue.

Tech Mahindra has strong AI activity without a comparable percentage

Q1 deal examples involved AI across:

• payments engineering,
• telecom operations,
• AIOps,
• aerospace and defence,
• network transformation.

Tech Mahindra has also emphasised sovereign AI, domain AI and agentic delivery.

It does not disclose a directly comparable percentage such as Mphasis's 63% of TCV.

Margin level slightly favours Mphasis

Mphasis's Q1 EBIT margin was approximately:

14.8%.

Tech Mahindra reported:

14.4%.

The difference is only around 40 basis points.

Margin direction overwhelmingly favours Tech Mahindra

Tech Mahindra's EBIT margin improved:

• about 60 bps QoQ,
• about 330 bps YoY.

Q1 EBIT in rupees increased:

53.3% YoY.

Rupee revenue grew 17.7%.

This is powerful operating leverage.

Tech Mahindra is approaching its 15% FY27 margin objective

Management has communicated confidence around reaching approximately 15% EBIT margin in FY27.

At 14.4% in Q1, the gap is no longer large.

Further improvement can come from:

• better utilisation,
• AI productivity,
• subcontractor optimisation,
• portfolio discipline,
• higher-margin growth.

Mphasis's Q1 margin pressure is partly investment-led

Mphasis built delivery capacity ahead of expected deal ramps.

This reduced near-term utilisation.

The quarter also contained acquisition-related costs.

Management retained its FY27 operating-margin range of approximately:

14.75% to 15.75%.

This creates opposite margin setups

Tech Mahindra:

margin recovering from a weak base.

Mphasis:

margin temporarily pressured while preparing for stronger growth.

Both can improve, but for different reasons.

Cash generation strengthens Tech Mahindra's turnaround quality

Tech Mahindra generated:

$167 million of Q1 free cash flow.

USD PAT was $154 million.

A simple analytical FCF-to-PAT ratio is therefore about:

108%.

The company did not label this as a formal FCF-conversion metric.

It demonstrates that the earnings recovery is cash backed.

Mphasis remains a meaningful dividend payer

Bull Run's August 25 data showed Mphasis with a dividend yield of around:

2.65%.

Tech Mahindra's Bull Run dividend yield was around:

3.40%.

Both therefore return more cash than many high-growth mid-cap IT peers.

Return ratios are close enough that valuation matters

Bull Run's August 25 fundamentals showed:

• Mphasis ROE: 18.29%,
• Mphasis ROCE: 24.41%,
• Tech Mahindra ROE: 16.89%,
• Tech Mahindra ROCE: 20.72%.

Mphasis currently has the stronger reported return ratios.

Tech Mahindra's margin recovery could narrow that difference if sustained.

Valuation favours Mphasis

Mphasis trades at a modest but meaningful discount.

That is interesting because it currently has:

• faster YoY CC growth,
• slightly higher EBIT margin,
• higher Bull Run ROE and ROCE.

Why does Tech Mahindra still command the larger multiple?

Possible reasons include:

• greater revenue scale,
• larger and more diversified client base,
• strong margin-recovery optionality,
• three consecutive $1B+ deal quarters,
• lower sector concentration,
• Mahindra Group ecosystem advantages.

Mphasis's valuation discount reflects concentration risk

A financial-services-heavy vendor can compound well when BFSI technology spending is strong.

But investors may assign a lower multiple because one broad macro sector influences such a large part of revenue.

This is similar to why commodity businesses often receive lower multiples despite high current profitability.

The earnings stream is perceived as more cyclical.

Bull Run market snapshot

The six-month share-price performance favours Tech Mahindra.

That reflects market recognition of the turnaround.

Mphasis's one-year decline means the stock has not received the same rerating despite improving operating momentum.

Which has better current growth?

Mphasis on the YoY CC measure.

8.3% versus Tech Mahindra at 6.6%.

Which has stronger sequential momentum?

Tech Mahindra slightly.

2.6% QoQ CC versus Mphasis at 2.1%.

Which has the higher current EBIT margin?

Mphasis slightly.

Approximately 14.8% versus Tech Mahindra at 14.4%.

Which has the stronger margin trajectory?

Tech Mahindra by a wide margin.

EBIT margin expanded roughly 330 basis points year on year.

Which has lower sector concentration?

Tech Mahindra.

Its largest vertical, Communications, represents about 32.3% of revenue versus Mphasis's approximately 69% broad financial-services exposure analytically.

Which has deeper BFSI specialisation?

Mphasis.

Its banking and insurance franchise is central to the business model.

Which has deeper telecom specialisation?

Tech Mahindra.

Communications remains its largest industry vertical and a long-standing domain strength.

Which has the larger Q1 deal engine?

Tech Mahindra.

$1.078 billion of new-deal wins versus Mphasis at $461 million net-new TCV.

Which has stronger deal consistency relative to its size?

Both are strong.

Mphasis has five straight $400M+ quarters; Tech Mahindra has three straight $1B+ quarters.

Which has clearer AI-led booking disclosure?

Mphasis.

63% of Q1 TCV was classified as AI-led.

Which is cheaper?

Mphasis.

Late-August trailing P/E was around 24.5x versus Tech Mahindra near 28.4x.

Mphasis vs Tech Mahindra: category-by-category

Which is stronger in 2026?

Mphasis currently has a compelling growth-versus-valuation combination.

It offers:

• 8.3% YoY CC growth,
• 9.9% Direct CC growth,
• five consecutive $400M+ TCV quarters,
• 63% AI-led Q1 bookings,
• slightly higher EBIT margin,
• lower current P/E.

The major trade-off is its roughly 69% broad financial-services exposure.

Tech Mahindra offers the stronger diversification and earnings-recovery story.

It offers:

• greater scale,
• all-vertical annual growth,
• 330-bps EBIT-margin expansion,
• 53.3% YoY EBIT growth,
• three consecutive $1B+ deal quarters,
• strong free cash flow.

The current comparison is therefore:

Mphasis = cheaper, faster-growing BFSI specialist with strong AI-led bookings but substantial sector concentration.

Tech Mahindra = more diversified large-cap recovery where margin expansion and manufacturing/BFSI growth are reducing dependence on telecom.

What to monitor next

• Mphasis Q2 CC growth: management expects a particularly strong sequential quarter.
• Mphasis BFS and Insurance growth: the largest source of both opportunity and concentration risk.
• Mphasis EBIT margin: utilisation should recover as large deals ramp.
• Mphasis AI-led TCV: 63% of bookings needs to convert into realised revenue.
• Mphasis pipeline: approximately 70% AI-led is a strong forward indicator.
• Tech Mahindra EBIT margin: watch progress toward approximately 15%.
• Tech Mahindra Communications: stabilisation would add another growth engine.
• Tech Mahindra Manufacturing: Q1's 17.2% YoY growth needs durability.
• Tech Mahindra BFSI: important for diversification away from telecom.
• Tech Mahindra deal wins: a fourth $1B+ quarter would strengthen the recovery case.

Frequently asked questions