Mphasis has told investors that the early stages of its short-cycle artificial intelligence programmes are now being delivered with a significantly higher share of onsite talent, a mix shift that is pressuring margins even as AI-led wins power a record quarter.
Disclosing its Q2 FY27 results for the quarter ended 30 September 2026, the Bengaluru-headquartered IT services firm reported revenue of 4,580.93 crore rupees, up 4.5% quarter-on-quarter and 17.4% year-on-year. The direct revenue grew 3.5% sequentially in constant currency, and new TCV wins totalled 466 million dollars, of which 66% was AI-led. Trailing-twelve-month TCV reached 1.8 billion dollars.
On the earnings call on 9 November, Chief Financial Officer Aravind Viswanathan said amortisation from the TAP acquisition and “a shift toward onsite work in AI programs” had weighed on profitability, while the firm maintained its FY27 EBIT margin band of 14.75% to 15.75%. First-half margin stood at around 14.8%. Chief Executive Officer and Managing Director Nitin Rakesh added that the firm was prioritising growth capture over the mid-point of its margin range. “Total pipeline reached a new high, growing 4.4% sequentially and 23% YoY,” Rakesh said.
Management told analysts that short-cycle AI programmes, which include AI foundations, data modernisation, infrastructure and cybersecurity work, often begin onsite before progressing into later delivery phases. The onsite-heavy mix means a greater share of Mphasis engineers now sit in client locations rather than in offshore pods during the opening months of a deal. The company also flagged that its forward-deployed engineer (FDE) model, built around Mphasis Tria, deploys “elite engineers” at the customer site to take the platform live.
