Mphasis Ltd Falls 4.74%: 5 Key Factors Driving the Weekly Decline

19 January 2026: Technical Momentum Shifts Bullish Amid Market Volatility

On Monday, Mphasis demonstrated a notable technical momentum shift to a bullish stance, closing at Rs.2,885.20, a modest decline of 0.06% but reflecting underlying strength with intraday highs reaching Rs.2,929.60. This shift was supported by positive moving averages and MACD indicators, signalling renewed investor confidence despite the broader Sensex falling 0.49% to 36,650.97. The stock’s resilience was underscored by its outperformance relative to the benchmark over multiple timeframes, including a 3.26% year-to-date gain versus the Sensex’s 1.94% loss.

20 January 2026: Mojo Upgrade to Buy Highlights Quality and Valuation Strengths

Despite a sharp 2.44% drop in stock price to Rs.2,814.90, Mphasis was upgraded to a Buy rating by MarketsMOJO on 19 January, reflecting strong operational metrics such as a 20.32% ROE, record quarterly sales of Rs.3,901.91 crores, and a robust cash position of Rs.16,157.80 crores. The upgrade acknowledged the company’s premium valuation with a P/B ratio of 5.7 and PEG of 2.8, signalling investor expectations of sustained growth. The stock’s technical indicators remained bullish, though the day’s price decline suggested some profit-taking amid market volatility. The Sensex fell 1.82% to 35,984.65, amplifying the challenging environment.

21 January 2026: Open Interest Surges Amid Mixed Price Action and Technical Signals

Mphasis saw a sharp 24.35% increase in open interest in its derivatives segment, rising to 31,073 contracts, despite the stock price declining 0.86% to Rs.2,790.75. The futures volume was robust at 27,819 contracts, with combined futures and options notional value exceeding Rs.1,01,765 crores. The stock traded below its short- and medium-term moving averages but remained above the 200-day average, indicating a longer-term bullish base amid short-term weakness. Delivery volumes dropped 39.52%, signalling reduced investor participation. The surge in open interest alongside price weakness suggested active repositioning, possibly through short positions or hedging strategies. The Sensex declined 0.47% to 35,815.26.

22 January 2026: Renewed Market Interest Evident in Open Interest and Delivery Volumes

On Thursday, Mphasis rebounded with a 0.79% gain to Rs.2,812.80, supported by a 24.8% surge in open interest to 31,401 contracts and a significant increase in delivery volumes to 9.05 lakh shares, a 223.66% rise over the five-day average. Derivatives turnover reached Rs.1,16,821.55 lakhs, highlighting strong market participation. The stock traded above its 200-day moving average but remained below shorter-term averages, indicating resistance ahead. The 1-day return of 0.73% outperformed the Sensex’s 0.48% gain, reflecting relative strength. This activity suggested renewed investor confidence and positioning for a potential upward move.

23 January 2026: Surge in Put Option Activity and Mojo Downgrade Signal Caution

Friday saw a notable increase in bearish sentiment as put option activity surged ahead of the 27 January expiry, with 6,955 contracts traded at the 2700 strike price. The stock closed at Rs.2,750.05, down 2.23% on the day, underperforming its sector by 2.8%. Delivery volumes fell sharply by 64.85% to 1.52 lakh shares, indicating waning investor participation. Despite remaining above its 200-day moving average, Mphasis traded below all shorter-term moving averages, reflecting short- and medium-term weakness. The mojo grade was downgraded from Buy to Hold with a score of 60.0, signalling increased caution. The surge in put options suggests investors are hedging or speculating on further downside, with the 2700 strike acting as a critical support level ahead of expiry.

Daily Price Comparison: Mphasis Ltd vs Sensex (19-23 Jan 2026)

Key Takeaways

Positive Signals: The week began with a bullish technical momentum shift and a MarketsMOJO upgrade to Buy, supported by strong operational metrics and record quarterly results. Renewed open interest surges and increased delivery volumes midweek indicated active market participation and potential positioning for a price recovery. The stock’s long-term performance remains robust, with significant outperformance over the Sensex across 5- and 10-year horizons.

Cautionary Signals: Despite early optimism, Mphasis faced consistent selling pressure, with the stock declining 4.74% over the week and underperforming the Sensex by 1.43%. Technical indicators turned mixed to mildly bearish by midweek, with price trading below key short- and medium-term moving averages. The surge in put option activity ahead of expiry and a mojo grade downgrade to Hold reflect growing investor caution and hedging. Declining delivery volumes towards week-end suggest reduced conviction among long-term holders.

Conclusion

Mphasis Ltd’s week was characterised by a complex interplay of technical optimism and emerging caution. Early bullish momentum and a rating upgrade were offset by persistent price declines and increased bearish positioning in derivatives markets. The stock’s resilience above its 200-day moving average offers some long-term support, but short-term technical weakness and heavy put option activity ahead of expiry highlight potential near-term volatility. Investors should closely monitor key technical levels and option market dynamics as the stock navigates this uncertain phase within a challenging broader market environment.

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