Mphasis shares slump nearly 3 percent fearing business hit on report that FedEx snapped business deal

Mphasis had projected to grow faster than the industry during FY26, and gaining from strong TCV wins and a steady conversion of TCV to revenue across the portfolio.

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Shares of IT services provider Mphasis were sharply lower on June 2, down nearly 4 percent after a news report said citing people familiar with the development that the company has lost business arrangement with FedEx - one of its oldest client - which contributes as much as 8 percent to the annual revenue.

A report by Livemint said on June 1 that FedEx will be ending its business arrangement with Mphasis after a ten-month transition, ending this year, effectively causing a loss of $130 million in business. This was the third-largest client for Mphasis, and the contract is likely to go to American multinational company Accenture, the report said. Moneycontrol is yet to independently verify this development.

Mphasis had projected to grow faster than the industry during FY26, and gaining from strong TCV wins and a steady conversion of TCV to revenue across the portfolio.

Mphasis' overall split of deals by vertical has shown a healthy pipeline in Logistics and Travel, underscoring the company's focus on deals in this segment. "...that's the one that we will absolutely focus on when it comes to the non-BFS jump of 99%, significant portion of that comes from that segment as well," Nitin Rakesh had said in April.

Companies in the business of global trade and logistics, supply chain have seen an impact of the ongoing tariff war, which Mphasis said has impacted their decision-making. During the March quarter earnings call, the management had said there were no project cancellations, and it was confident of sustaining the deal momentum over the coming quarters.

Mphaisis has been focusing on the AI theme in its deal wins. During the March quarter, the company, "...we're happy to report that 59% of the TCV in Q4 is AI-led. New TCV wins for the quarter were $390 million, the highest in the past 7 quarters." Mpahsis said it won two large deals in Q4FY25, taking the total tally to 13 deals during the full year. The management has been attempting to broad base its TCV wins across verticals and the client pyramid.

So far this year, shares of Mphasis are down 13 percent.