MPS Ltd Q1 FY27 Earnings Analysis

- FY’27 EBITDA guidance over INR 300 crores, implying a top line of INR 900 crores to INR 1,000 crores organically. - Research segment expected to contribute ~55% of EBITDA, continuing its growth and high profitability. - Education segment (~35% of EBITDA) on a growth trajectory, boosted by AI-enabled content, accessibility services, and the Unbound acquisition expanding customer base. - Corporate Learning (~10% of EBITDA) turning around with investments in digital multimedia, AI-led simulations, and higher value offerings leading to stickier and longer engagements. - Expansion in new geographies like China, Japan, and broader APAC, leveraging platform partnerships and local collaborations. - AI-driven productivity and workflow transformation driving growth and margin improvement across segments. - High renewal rates and broadening customer base, especially from Unbound acquisition, creating predictable revenue growth. - Future growth supported by integrated platforms and 200+ AI engineers at MPS Labs enabling scalable capabilities.

- FY’27 guidance expects EBITDA to comfortably surpass INR 300 crores, implying a 3-year EBITDA CAGR of approximately 21% from FY’24 to FY’27. - EPS is expected to comfortably surpass INR 100 crores in FY’27. - EBITDA split expectations for FY’27 are approximately: Research 55%, Education 35%, Corporate 10%. - Research segment expected to continue compounding due to scale and profitability. - Education is on a growth trajectory, helped by the acquisition of Unbound. - Corporate Learning business is turning around with stronger FY’27 prospects due to investment in digital and AI-enabled solutions. - EBITDA margin guidance for FY’27 is estimated in the range of 30%-35%, with margins typically expanding as revenue grows. - The company aims to achieve INR 1,500 crores top-line by FY’28, supporting continued earnings growth. - Focus remains on organic growth and disciplined inorganic acquisitions to drive earnings expansion.

- Capital allocation principle: capital must earn its keep within 12 months or be returned to shareholders. - Over FY’19 to FY’25, more than INR 650 crores of cumulative cash returned to shareholders. - FY’26 Board chose not to recommend a final dividend due to capital deployment in Unbound Medicine acquisition and active M&A pipeline. - Current focus on active M&A pipeline with 35 companies, 5 advanced, 5 live, 2 at advanced stages fitting existing segments. - Strategic acquisitions underway, including a Higher Ed and Online Learning carve-out in Western markets and a cross-border asset. - Emphasis on disciplined capital deployment on defensible growth assets with clear capabilities and customer fit. - Current investments focus on integrating Unbound Medicine and expanding AI-first knowledge solutions infrastructure. - Future capital distribution will resume post completion of deployment cycle.

- No immediate fundraising through debt or equity explicitly mentioned. - The Unbound Medicine acquisition has mostly been paid for, with minor closing amounts remaining. - The company has a highly active and expanding M&A pipeline with about 35 companies under consideration; 5 are advanced, 5 live, and 2 at advanced stages. - Focus remains on disciplined acquisitions with sensible valuations and clear strategic fit. - Capital allocation principle: capital must earn its keep within 12 months or be returned to shareholders. - No final dividend recommended for FY’26 due to capital deployed in acquisitions and an active deployment cycle. - Distribution (dividends) will resume once the deployment cycle closes. - The company prioritizes organic growth and selective inorganic opportunities without announcing any immediate fundraising plans.

- Q4 FY'26 closed with the strongest order book of the year. - Added new entrants across top customer relationships. - AI-led wins continue to anchor the new pipeline. - Deliberate integration into a unified global structure is on plan. - Focus for FY’27: sustain Q4 exit margin, scale AI-led delivery, and complete integration of legacy entities into Liberate Global. - Operating plan for FY'27 is already in flight with Unbound integration and growth in Research and Corporate Learning segments. - Pipeline for acquisitions has 35 companies under consideration; 5 fairly advanced, 5 live, and 2 at an advanced stage fitting existing segments. (Source: Pages 6, 7, 15, and 16 of the document)