SYNOPSIS: This company reported weak Q3 FY26 earnings with declining revenue, profit and margins. Despite near-term pressure, the company remains debt-free, offers strong returns and dividend yield, with Mukul Agrawal holding 4.46 percent.
This premier learning and platform solutions provider operating at the intersection of content, technology, and artificial intelligence (AI) has come into focus followed by its ability to seamlessly combine deep domain expertise in content with advanced platform engineering and AI-driven capabilities enables scalable growth, strengthening long-term strategic partnerships, and reinforcing its position as a trusted partner within the global learning and knowledge ecosystem.
We are talking about MPS Limited, which provides platforms and services for content creation, full-service production, and distribution to the world’s leading publishers, learning companies, corporate institutions, libraries, and content aggregators.
With a market cap of Rs. 2,805 crores, shares of MPS Limited closed in the green at Rs. 1,640 on Tuesday, up by 9 percent, as against its previous closing of Rs. 1,504.65 on BSE. The stock has delivered negative returns of around 40 percent in one year, as well as nearly 3 percent in the last one month.
Financials
For Q3 FY26, the company posted a consolidated revenue from operations of Rs. 182 crores, reflecting a sequential decline of over 6 percent QoQ compared to Rs. 194 crores in Q2 FY26. Likewise, on a year-on-year basis, revenue fell nearly 2 percent from Rs. 186 crores recorded in Q3 FY25.
Net profit for Q3 FY26 stood at Rs. 36 crore, indicating a decrease of nearly 35 percent QoQ from Rs. 55 crores in Q2 FY26, as well as a year-on-year decline by over 12 percent from Rs. 41 crores reported in Q3 FY25.
Operating performance deteriorated during the quarter, with EBITDA falling to Rs. 57.6 crore, marking a decline of around 5 percent YoY from Rs. 60.3 crores in Q3 FY25, while EBITDA margins fell to 31.55 percent, reflecting a contraction of 80 bps YoY from 32.38 percent. MPS maintain a strong, debt-free balance sheet, supported by cash and cash equivalents of Rs. 143 crore as of December 31, 2025.
Revenue Mix, Key Financial Ratios & More
For Q3 FY26, the Research Solutions segment continued to dominate the revenue mix, contributing around 63 percent of total revenue. Within this, the Education Solutions emerged as the second largest segment, accounting for about 24 percent. The remaining 12 percent is contributed by the Corporate Learning segment.
In terms of financial ratios, MPS has a RoE of 30.5 percent, ROCE of 40.9 percent, and a dividend yield of 5.55 percent. Further, the stock is currently trading at a higher P/E of 15.6, compared to the industry average of 20.2, indicating the stock might be undervalued. As per the December 2025 shareholding pattern, the renowned ace investor Mukul Mahavir Agrawal holds a 4.46 percent stake in the company.
Management Guidance
Management highlighted its outlook, guidance and key watch items for the coming quarters. The company is comfortably positioned to achieve an EPS of over Rs. 100 for the first time in FY26, describing the target as conservative. Additionally, the management also flagged a temporary EPS headwind of around Rs. 3.5 per share arising from the exceptional impact of the new Labour Code.
For Q4, management expects performance to improve compared to Q3 and anticipates outperforming Q3 benchmarks, supported by ongoing cost actions and the commencement of Unbound synergies.
Looking ahead to FY27, the Research segment is expected to strengthen as AJE stabilises, while the Education segment is projected to deliver stable double-digit growth. The Corporate segment is anticipated to return to growth, driven by a unified go-to-market strategy and a sharper focus on managed services, along with incremental contribution from Unbound.
On capital structure, management clarified that there are no plans for equity financing or a QIP, and that the proposed acquisition will be funded through debt, with further details to be disclosed. Additionally, the CEO noted that the strength of USD, EUR and GBP against the INR remains accretive to margins, providing a favourable foreign exchange tailwind.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
