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Investing.com - UBS initiated coverage on Mphasis Ltd. (MPHL:IN) with a Buy rating and a price target of INR3,370.00 on Monday.
The investment bank cited potential recovery in revenue growth as a key factor in its positive outlook, noting that current market valuations do not fully reflect this expected improvement.
UBS highlighted that headwinds from Mphasis’s large customer DXC, its Digital Risk subsidiary, and vertical-specific issues have largely subsided, positioning the company for accelerated growth.
The firm projects a 10% compound annual growth rate (CAGR) for Mphasis from FY25-28, a significant improvement from the 2% CAGR seen in FY22-25, which would help the company catch up with mid-cap peers.
Current valuations imply a 7-8% revenue CAGR over FY25-30, according to UBS calculations, which falls below the bank’s own estimate of 11% for that period, suggesting potential upside for the stock.
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