MPS Ltd (MPSLTD) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '27 earnings call of MPS Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*", then "0" on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Rahul Arora, Chairman and CEO. Thank you, and over to you, sir.
Rahul Arora (MPS Limited): Thank you, Shruthi. Good evening from Singapore, and a warm welcome to our Q2 and H1 FY '27 earnings call. With me on the call are Prarthana Agarwal, our CFO, who's joining us from our corporate office in Noida; Christine Miranda, Senior Vice President, Research Solutions, joining us from Mumbai; and Sanjeev Talwar, Senior Vice President and Business Head, Education Solutions, joining from Noida. Before I hand it over, one thought to hold through the call: the results are in the filings, and Prarthana will take you through the ones that matter. What I would request you to listen for is why they our numbers keep moving the same way. For six quarters, our earnings have grown faster than our revenue, and the reason is what MPS has become: an AI-first knowledge company that owns its platforms and owns its IP, and we are now paid for outcomes. Each of my colleagues will show you what that looks like in their part of the business. Prarthana will start the proceedings with our financial performance and outlook. Christine will then take you through Research Solutions, and Sanjeev through Education. This quarter, I will cover Corporate Learning myself, and I will close with a few thoughts before we open the line to your questions. Over to you, Prarthana.
Prarthana Agarwal (MPS Limited): Thank you, Rahul. Good evening, everyone. The detailed results are in the filings, so let me focus on what they say about the quality of our earnings. The first half of FY '27 was the most profitable half year in the history of MPS. Revenue grew 17.8% to INR 448.5 crores, and EBITDA grew 39% to INR 154 crores at a margin of 34.3%. In the second quarter, the margin was again 34.3%, the highest MPS has reported, and the second quarter in a row above 34%. The pattern matters more than any single quarter. Over the last six quarters, revenue grew about 20%, and EBITDA grew about 53%. That gap is operating leverage. Each new rupee of revenue now arrives on platforms and teams we have already built, so more In the second quarter, EBITDA per employee rose about 15%, even as we hired ahead of new work. On profit after tax, last year's second quarter carried a one-time income gain of about INR 12.8 crores
Prarthana Agarwal (MPS Limited): The earnings are also turning into cash. DSO came down to 38 days from 45 at the end of June. In August, we repaid in full the borrowings we took for Unbound Medicine. So, we carry zero debt and we held INR 163 crores of cash as on 30th September. The base under those earnings is getting wider as well. We billed 839 clients in the quarter against 422 a year ago and our top five clients fell to 46% of revenue from 51%. This brings me to the outlook. We began the year expecting to comfortably cross INR 300 crores of EBITDA. We are now raising the floor and we expect FY '27 EBITDA to be at least INR 310 crores. The second half leans towards the fourth quarter when the mandates we won this half bill for a full 3 months. Also because we planned the business at an exchange rate well below today's, the new floor does not depend on the currency. With this, over to you, Christine.
Christine Miranda (MPS Limited): Thank you, Prarthana, and good evening, everyone. I want to start with what has changed in our customers' world. At a time when anyone can generate a manuscript in minutes, the hard problem in research is no longer producing content. It is knowing what can be trusted. Paper mills and machine-written papers have made managing research quality and integrity at scale a top priority for every large research company we work with. That shift is creating work for MPS and it is work we are well placed to do because it sits on top of the production and peer-review workflows we already run for those customers. Our customers pay us for outcomes, such as a paper made ready or a submission reviewed. As AI makes our teams faster, customers get their work back sooner and at a scale they could not reach before, and they bring more of us more of it to us. That volume flowing through the same platforms and teams is why the margin keeps rising. Research margins reached 48.2% this quarter, up more than six points in a year. Excluding AJE, revenue grew about 22% at a margin close to 50% with no acquisition in that number. You can see the trust in how our relationships are growing. In the last quarter, one of our biggest customers gave us a large new production mandate and a research integrity mandate that builds from November. One of the five largest companies in our market is moving more than 110,000 submissions a year onto our peer-review platform. When the largest companies in our market consolidate their partners, they move towards the ones they trust most. AJE is part of that story. It opened a second door to research quality and integrity. Customers now buy three and four lines of work from us when they once bought one. AJE also brought us the AI language engine we have since rebuilt as Rubric. We are hiring ahead of these mandates and our second half is about bringing them to a steady state while holding the margins as they scale. With that, over to you, Sanjeev.
Sanjeev Talwar (MPS Limited): Thank you, Christine. Good evening, everyone. Education is the Learn side of MPS and it has become a real second pillar. It is a 30 It is 30.6% of group revenue today, up from 27.2% a year ago. In the first half, revenue grew 36% and EBITDA grew 14.5%. Two things make this business durable. The first is the US adoption calendars. States choose the programs the schools will use for years at a time. Each adoption sets off a wave of content and accessibility work for the companies that serve those schools. Our bookings this quarter were led by work for Florida's upcoming math adoption and California follows, so we are positioned early for the next wave. The second is healthcare knowledge through Unbound Medicine. Unbound turns trusted clinical content into answers at the point of care for medical schools, nursing programs, hospital systems, and medical societies. It is a subscription revenue that renews year after year and it contributed INR 41.6 crores in the half. Its royalty-based model carries a lower margin than our solutions work and in turn, it gives education a recurring base it never had before. The next step for Unbound is hospitals