Concerns may be overdone, downside limited for Mphasis stock

While there are worries over de-growing DXC business and buzz of Blackstone's exit, deal pipeline and growth in other verticals remain strong

Shares of Bengaluru-based IT services company Mphasis are trading with marginal gains over the past 3 months, sharply lagging the Nifty IT index's 18 per cent gains during this period. While its outperformance during July-September could be a reason, concerns over Mphasis’ DXC business and the buzz around stake sale by private equity (PE) player Blackstone have kept investors on the sidelines despite the company's healthy fundamentals.

Mphasis is a subcontractor/partner for DXC Technology, a US-based IT services and solutions company that has seen pressure on its business and is undergoing restructuring. Consequently, Mphasis reported a third successive quarter of revenue