MPS — Q2 FY26 earnings call

Call held 12 Nov 2025

Management summary

MPS Limited reported a strong Q2 FY26, driven by robust growth in its Research and Education segments, which saw significant margin expansion due to AI-powered workflows and operational efficiencies. Despite a soft year for Corporate Learning, strategic consolidation efforts are underway, with expectations for a turnaround in FY27. The company maintains a debt-free balance sheet and improved working capital management, while firmly declining to provide short-term guidance.

Highlights

  • Revenue of INR 194.44 crores, up 9.42% YoY.

  • EBITDA improved 13.03% YoY to INR 60.47 crores.

  • PBT rose sharply by 43.92%, aided by operational efficiency and net exceptional income of INR 12.81 crores.

  • EBITDA margins at 31.10%, a 99 basis points YoY increase.

  • EPS stood at INR 32.67, up 57.3% YoY.

  • Research Solutions contributed 61.5% of total revenue, with 18.32% YoY organic growth (ex-AJE).

  • Education business revenue grew 52.4% YoY, with EBITDA margin expanding from 28.8% to 35.6%.

  • DSO improved from 45 days in Q1 FY26 to 37 days in Q2 FY26.

Key financials

  1. Revenue ₹194.44 Cr +9.4%YoY
  2. EBITDA ₹60.47 Cr +13%YoY
  3. PBT Growth — +43.9%YoY
  4. EBITDA Margin 31.1%
  5. EPS ₹32.67 +57.3%YoY
  6. Net Exceptional Income ₹12.81 Cr
  7. Cash & Equivalents ₹117 Cr
  8. DSO 37 days

What they filed

Q1 FY27: revenue up 24.0%, net profit up 41.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue87 90 94 100 111 +28%108 +20%119 +27%124 +24%
EBITDA35 34 35 34 44 +26%41 +21%48 +37%54 +59%
Net profit27 29 27 29 30 +11%25 −14%44 +63%41 +41%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Research Solutions
    61.5% Revenue Contribution18.3% Organic Growth (ex-AJE)30.2% AJE Margins42% Research Margins (blended)
  • Education Business
    52.4% Revenue Growth35.6% EBITDA Margin
  • Corporate Learning Business
    11.3% Revenue Contribution (Q2 FY26)17.2% Revenue Contribution (Q2 FY25)12.6% H1 FY26 Revenue Contribution16.8% H1 FY25 Revenue Contribution

Guidance & targets

Revenue

  • Revenue Revenue · FY'27 · Medium confidence INR 1,500 crores
    We could then get to INR 1,500 crores in Revenue fairly quick, even ahead of FY '28.

    — Rahul Arora, Chairman and CEO

Acquisitions

  • Acquisition Capital Acquisitions · next 12 to 18 months · High confidence INR 300-400 crores
    If you combine the INR 200 crores of debt capacity with the INR 150 crores of cash, that gives us INR 350 crores, and we can comfortably target INR 300-400 crores of acquisitions over the next 12 to 18 months.

    — Rahul Arora, Chairman and CEO

Cash Management

  • Minimum Cash Balance Cash Management · any point in time · High confidence INR 150 crores
    the business should maintain approximately INR 150 crores of cash at any point in time.

    — Rahul Arora, Chairman and CEO

Debt

  • Comfortable Debt Level Debt · High confidence INR 200 crores
    where we have arrived at is that we are comfortable with, say, INR 200 crores of debt

    — Rahul Arora, Chairman and CEO

Corporate Learning

  • Revenue Contribution Corporate Learning · by FY'28 · Medium confidence 20%
    And I expect over a period, as we get to FY'28, going back to the 20% level as the business grows.

    — Rahul Arora, Chairman and CEO

Margin

  • AJE Margin Expansion Margin · Q3 and Q4 · High confidence further improvement
    So, we are expecting to see further improvement in margin expansion for Q3 and Q4.

    — Christine Miranda, Senior Vice President of Research Solutions and Head of AJE

Risks & concerns

  • Cultural alignment and cross-cultural team integration during acquisitions.

    medium

    Rahul Arora stated, 'The key focus should be on cultural alignment and how cross-cultural teams will work together, as this is likely to present the greatest challenge and opportunity.'

    Management acknowledged

  • Potential slowdown in demand due to macro environment (geopolitical tensions, tariffs).

    low

    Rahul Arora stated, 'Overall, we remain bullish about the FY'28 vision, and we are not seeing anything yet that suggests that there is a slowdown.' and cited past resilience during the pandemic.

    Analyst downplayed

Areas of evasion (1)

  • Short-term (H2) financial guidance

Q&A highlights

2 direct, 1 evasive
Company's stance on equity financing (QIP) and capital for acquisitions. Direct
As far as equity financing is concerned, I don't see it happening in the near future, to be completely blunt. It's not something that we will possibly be doing in the near future.

Management explicitly stated they do not foresee equity financing (QIP) in the near future, which is a significant signal for investors concerned about dilution, and clarified their capital strategy for acquisitions using debt and internal cash.

Asked by Ravi Naredi

Management bandwidth to handle multiple simultaneous acquisitions. Direct
My personal bandwidth is allocated entirely to these 5 acquisition deals that are coming up. Unlike the past, where we acquired to operate, now, we are acquiring to grow.

This question addresses a potential operational risk of overstretching resources with aggressive M&A, and management's detailed response about leadership expansion and strategic shift from 'acquire to operate' to 'acquire to grow' provides reassurance.

Asked by Navid Virani

Refusal to provide H2 guidance despite strong Q2 results. Evasive
That's exactly what guidance is! You are asking me for guidance. We won't be giving any guidance. No thumbs up, thumbs down, no guidance at all.

Despite repeated requests and strong Q2 performance, management firmly refused to provide any short-term guidance, which could be seen as a lack of transparency or a deliberate strategy to manage expectations, leaving investors to infer H2 performance.

Asked by Hemant

3 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance Driven by Research and Education

MPS Limited reported robust Q2 FY26 results with revenue reaching INR 194.44 crores, marking a 9.42% year-on-year increase. EBITDA grew 13.03% to INR 60.47 crores, leading to an EBITDA margin of 31.10%, a 99 basis points expansion year-on-year. The Education business saw exceptional growth, with revenue up 52.4% and EBITDA margin expanding from 28.8% to 35.6%, largely attributed to AI-powered workflows. The Research Solutions segment, contributing 61.5% of total revenue, achieved an 18.32% organic growth (excluding AJE), with AJE margins improving from 23.7% in Q1 to 30.2% in Q2.

Strategic Acquisitions and Capital Allocation

Management outlined an aggressive acquisition strategy, targeting INR 300-400 crores in acquisitions over the next 12-18 months, aiming to accelerate towards its Vision 2027 revenue target of INR 1,500 crores. The company is comfortable with INR 200 crores of debt and plans to maintain approximately INR 150 crores in cash. Notably, management explicitly stated that equity financing (QIP) is not anticipated in the near future, preferring a strategy of debt first, followed by internal cash generation.

Corporate Learning Restructuring and Future Outlook

The Corporate Learning segment experienced a soft year, with its contribution to total revenue decreasing from 17.2% in Q2 FY25 to 11.3% in Q2 FY26. However, management is optimistic for H2 FY26 and FY27, following significant restructuring. This includes the acquisition of the remaining 35% stake in Liberate Group and the integration of MPS Europa AG under MPSi. Rodney Charles Peach, former Liberate Group promoter, has also invested in MPSi and been appointed President of the Corporate Learning segment, with expectations for the segment to return to a 20% revenue contribution by FY28.

AI Integration Driving Efficiency and Growth

AI and automation are playing a critical role in MPS's operational efficiency and margin expansion. Over 60% of the growth in the Education business is attributed to AI-powered workflows and solutions, contributing to its significantly improved EBITDA margins. In Research Solutions, AI agents are being leveraged in SaaS product development and language editing. MPS Labs is expanding its Data and AI practice, focusing on building strong data foundations for clients and developing AI-infused Go-To-Market offerings, with early traction already observed.

Management Bandwidth and Integration Strategy for M&A

Addressing concerns about management bandwidth for multiple acquisitions, Rahul Arora detailed the expansion of the senior leadership team from 7 to 16 people and the Torchbearer initiative. He emphasized a shift from 'acquiring to operate' to 'acquiring to grow,' with new management from acquisitions being integrated. For upcoming deals, particularly in Education, a 'loose integration model' is planned, where common functions integrate quickly (90-120 days), but business units largely remain independent, focusing on cross-selling and leveraging MPS's customer base.

Refusal of Short-Term Guidance and Long-Term Vision

Despite strong Q2 FY26 results and analyst inquiries, management firmly declined to provide any short-term (H2) financial guidance, stating it does not add value to the company's journey. Instead, they reiterated their commitment to the bold FY28 vision and their focus on revenue growth and EPS. This stance, while maintaining a long-term outlook, leaves investors to interpret the short-term trajectory based on the reported Q2 performance.

This is an AI-generated summary of a publicly available earnings call transcript.
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