IT company Mphasis saw its share price drop by 4.6% to hit an intraday low of Rs 2,752. The company had announced its Q2 results for the current fiscal year, with net profits rising 10.8% YoY to ₹ 4,691 million in quarter under review, and up by 6.2% sequentially.

Even gross revenue grew 11.4% YoY in Q2 FY26 and 5.3% QoQ and, while in constant currency terms, growth of 6.0% YoY and 2.0% QoQ and was noted. The company also bagged New TCV wins of $528 million in direct, of which 87% is in new-gen services. Profit before tax also rose by 2.41% to Rs 624.78 in Q2FY26, versus Rs 610.07 crore in Q1FY25.

Then what is driving the cautious investor sentiment?

While net profit has risen over the span of a year, net margins also grew 20 bps QoQ and remained flat YoY to 12.0% in Q2 FY26. On the other hand, gross profit margins have declined both in YoY and QoQ basis. Gross margins have declined 80 bps QoQ and YoY to 28.1% in Q2 FY26.

Even cash and cash equivalents reduced by Rs 8,568 million during the quarter to Rs 32,754 million, while billing days have risen by 5 days, from 84 days in Q1FY26 to 89 days in the quarter under review.

Meanwhile, revenue from the top five clients of Mphasis have also declined substantially on a YoY basis. Revenue concentration was at 43% in Q2FY25, which has dropped to 39% in Q2FY26.

Mphasis’ stock performance over time

The IT scrip, which is current trading at Rs 2768.90, down by 4.32% from yesterday’s closing, has been on a decline in the past five sessions, down by 2.86%. The stock has risen 4.33% over a month, and up by 12.20% over six months. On a year-to-date basis, the stock has maintained the bearish trend, declining by 2.89%.

Due to US tariffs and hike in H1B visa fees, Mphasis’ shares, along with the rest of the IT sector was under pressure, resulting in the Nifty IT index remaining flat since April.