With efficiency improvements of 20–30% and a noticeable transition from a people-based services model to a technology-based one, Mphasis is witnessing real business transformation as a result of its artificial intelligence (AI) projects. Nitin Rakesh, MD and CEO, told FE.
According to him, these enhancements are radically altering deal structures and customer outcomes in addition to the way the company provides services.
“From a contribution perspective, I think you can see efficiencies of 20-25%, 30% sometimes, and then you can use those to also help the client, let’s say do application modernisation,” Rakesh explained. “It gives us the ability to fundamentally change the narrative, move away from people-based services to tech-based solution and aligning to outcomes that clients are trying to drive for their businesses.”
The company’s AI-driven business momentum has increased significantly. Only 30–35% of its contract wins two quarters ago were AI-driven. Now, that figure has almost doubled to 65%.
“Two quarters ago, 35% of the pipeline was AI-led. Today, that number is 65%,” said Rakesh. “That basically means that either AI is embedded in it, or there’s an element of adoption, or we’re using AI to change something around efficiency or speed or quality of outcome.”
AI is also helping Mphasis unlock cost and time efficiencies that were not feasible earlier. “We are able to actually eliminate about 60% of the time to market concern…And of course, if you eliminate time and eliminate errors, you are going to actually see 30-40% cost elimination,” he said, referring to a client modernisation deal powered by the company’s AI platform NeoZeta.
Mphasis reported a 4.4% increase in net profit (Rs 446.5 crore) and a 4.5% sequential revenue gain (Rs 3,717.5 crore) for the March quarter. At 15.3%, the operating margin was constant from quarter to quarter.
“We are pleased with a quarter of broad-based performance, reporting the highest q-o-q growth in 12 quarters, highest TCV wins in seven quarters and 86% y-o-y growth in pipeline,” said Rakesh.
In its direct business, the company’s total contract value (TCV) wins increased from $351 million in Q3 to $390 million in Q4.
Rakesh did, however, recognize the mounting apprehension around the potential US tariffs, particularly for industries directly exposed to international supply chains and commerce.
“The impact is a little bit nuanced based on industry…for example, there are certain industries that are in the straight line of fire, like manufacturing, auto, metals, logistics, global trade, supply chains. Then there is a whole set of industries that are…second-order impact industries, like banks, insurance companies, healthcare companies,” he said.
“Given that 70-75% of our revenues…happens to be with industries that are second-order impact industries, so far, we haven’t seen a major shift, but…uncertainty creates the ability to, you know, delay decisions and defer, you know, large programs.”
However, he stated that if this continues for another quarter or two, there won’t be “any place to hide,” since every industry and business will be affected to some degree.
Despite the uncertainty, demand for strategic technology initiatives like AI remains strong. “One bank’s CEO said recently that just because there’s macro uncertainty doesn’t mean we will not continue to implement AI at the bank,” he added.
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