Buy MPS Ltd For Target Rs. 3,463 By Sushil Finance
Highlights from the Quarter (Q3FY26):
MPS Ltd reported a flat set of numbers in Q3FY26, with revenues stable at Rs.182.5cr, moderately down 2.0%. EBITDA margins too fell by 4.3% for the quarter at Rs.57.6cr.
PBT for Q3 included a one-time exceptional item of Rs.7.0cr, which was a provision for benefit obligations due to the New Labour Code. The company characterized Q3FY26 as a "holding quarter," serving as a transition period to support broader shifts while preserving its long-term growth trajectory.
Segmental Performance:
Research Solutions - This remains the anchor segment, contributing 63.3% of total revenue. Excluding AJE, the segment grew 16.2% YoY, supported by operating leverage.
Education Solutions - Education Solutions emerged as a key growth driver, increasing its contribution to total revenue to about 24% in Q3FY26, compared with around 20% in the previous year. The segment continues to invest in AI-assisted production, accessibility frameworks, and platform-led offerings. Looking ahead, management expects Education Solutions to deliver stable double-digit growth with sustained high margins, making it a core pillar of medium-term growth.
Corporate Learning - The Corporate Learning segment experienced a YoY decline in revenue during Q3, reflecting a conscious and strategic reset. Management deliberately exited low-margin work and focused on restructuring the segment to improve long-term profitability and scalability.
Reasons for margin pressure in Q3: Margins declined in Q3FY26 primarily due to a one-time Labour Code provision and short-term impact from restructuring and exit of low-margin corporate learning contracts.
Looking ahead, management remains confident of surpassing an EPS of Rs.100 in FY26, supported by expectations of a stronger Q4 performance relative to Q3. For FY27, the company anticipates mid-teens growth in Research Solutions, sustained double-digit growth in Education Solutions, and a return to growth in Corporate Learning.
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