Key Events This Week
2 Feb: Downgrade to Sell amid technical weakness and valuation concerns
3 Feb: Strong gap up opening with 3.31% daily gain
4 Feb: Intraday low hit amid heavy put options activity and 15% open interest surge
5 Feb: Technical momentum shifts to bearish with 4.64% decline
6 Feb: Week closes at Rs.2,609.85, down 0.31% on the day
2 February 2026: Downgrade to Sell Amid Technical and Valuation Concerns
Mphasis was downgraded from Hold to Sell by MarketsMOJO on 1 February 2026, citing deteriorating technical indicators and expensive valuation metrics. The Mojo Score dropped to 44.0, reflecting a cautious outlook. Technical tools such as MACD and KST oscillators shifted to mildly bearish on weekly and monthly charts, while Bollinger Bands indicated increased volatility with a bearish bias. The stock traded marginally lower at Rs.2,759.40 (-0.03%) on 2 February, underperforming the Sensex which fell 1.03% that day.
Valuation concerns were highlighted by a high Price to Book ratio of 5.5 and a PEG ratio of 2.8, suggesting that earnings growth has not justified the premium pricing. Promoter shareholding also declined by 9.51% in the previous quarter, signalling reduced confidence. Despite a strong long-term track record, the flat financial performance and technical weakness weighed on sentiment.
3 February 2026: Strong Gap Up and Outperformance Amid Positive Market Sentiment
On 3 February, Mphasis opened with a significant gap up of 5.1%, reflecting positive overnight sentiment and sector strength. The stock closed at Rs.2,820.30, up 2.21% on the day, outperforming the Sensex’s 2.63% gain. Intraday, it reached a high of Rs.2,969.00, marking the week’s peak price. The stock traded above all key moving averages, signalling short-term bullish momentum despite the broader technical caution. The IT software sector gained 2.28%, with Mphasis outperforming by 0.65%.
This strong performance was supported by elevated delivery volumes and a high beta of 1.42, indicating amplified price swings relative to the market. However, weekly and monthly indicators remained mildly bearish, suggesting the rally might face resistance.
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4 February 2026: Intraday Low and Sharp Open Interest Surge Amid Bearish Price Action
The stock faced significant selling pressure on 4 February, closing at Rs.2,689.55, down 4.64%. It hit an intraday low of Rs.2,634.80, a 6.58% drop from the previous close. This decline occurred despite the Sensex gaining 0.37%, highlighting Mphasis’s relative weakness. The IT software sector also declined 3.51%, with Mphasis slightly outperforming the sector’s fall.
Notably, open interest in derivatives surged by nearly 15%, rising from 21,630 to 24,870 contracts, signalling increased bearish positioning. Futures volume was robust at 20,707 contracts, with combined futures and options value exceeding ₹3,700 crores. The weighted average traded price skewed towards the lower end, confirming selling pressure. The stock traded below all major moving averages, reinforcing the downtrend.
Technical momentum showed mixed signals: while daily moving averages turned mildly bullish, weekly and monthly MACD and KST oscillators remained bearish. Bollinger Bands on weekly charts indicated bearishness, while monthly charts were sideways. On-Balance Volume was flat, suggesting weak volume confirmation for price moves.
5 February 2026: Technical Momentum Shifts Bearish as Price Declines Further
Mphasis continued its decline on 5 February, closing at Rs.2,647.25, down 1.57%. The stock traded within a volatile range of Rs.2,615.70 to Rs.2,779.95. Technical indicators confirmed a shift to a mildly bearish trend, with MACD and Bollinger Bands bearish on weekly and monthly charts. The RSI remained neutral, indicating no oversold condition yet. Daily moving averages still showed mild bullishness, but volume-based indicators like On-Balance Volume and KST oscillator turned bearish.
This technical deterioration coincided with the stock underperforming the Sensex, which declined 0.53% that day. The Mojo Grade remained at Sell, reflecting the cautious stance. Despite the short-term weakness, Mphasis’s long-term returns remain strong, with a 10-year gain of nearly 497%, well above the Sensex’s 244%.
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6 February 2026: Week Ends with Continued Downtrend and Mild Loss
The week concluded with Mphasis closing at Rs.2,609.85, down 1.41% on the day and 5.45% for the week. The Sensex gained 0.10% on 6 February, further emphasising the stock’s underperformance. Technical momentum remained bearish, with the stock trading below key moving averages and mixed signals from oscillators. The daily moving averages’ mild bullishness was insufficient to reverse the downtrend.
Volume remained subdued at 4,501 shares traded, indicating cautious investor participation. The stock’s relative weakness against the Sensex and sector highlights ongoing challenges amid valuation concerns and technical pressure. Despite this, Mphasis’s long-term fundamentals and management efficiency remain strong, offering a foundation for potential recovery if conditions improve.
Daily Price Comparison: Mphasis Ltd. vs Sensex (2–6 February 2026)
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-02 | Rs.2,759.40 | -0.03% | 35,814.09 | -1.03% |
| 2026-02-03 | Rs.2,820.30 | +2.21% | 36,755.96 | +2.63% |
| 2026-02-04 | Rs.2,689.55 | -4.64% | 36,890.21 | +0.37% |
| 2026-02-05 | Rs.2,647.25 | -1.57% | 36,695.11 | -0.53% |
| 2026-02-06 | Rs.2,609.85 | -1.41% | 36,730.20 | +0.10% |
Key Takeaways
Positive Signals: Despite the week’s decline, Mphasis maintains a strong long-term performance record, with 10-year returns exceeding 490%. Management efficiency remains high, and the stock’s daily moving averages occasionally show mild bullishness, indicating potential for short-term rebounds.
Cautionary Signals: The downgrade to Sell by MarketsMOJO reflects deteriorating technical momentum and valuation concerns. The stock underperformed the Sensex by over 6.9% this week, with bearish MACD, KST, and Bollinger Bands on weekly and monthly charts. The sharp rise in derivatives open interest amid falling prices signals increased bearish bets. Promoter stake reduction and flat financial growth add to the cautious outlook.
Overall, Mphasis is navigating a challenging phase with mixed technical signals and fundamental headwinds. Investors should monitor key support levels and technical indicators closely while considering the stock’s long-term strengths.
Conclusion
The week ending 6 February 2026 was a difficult one for Mphasis Ltd., marked by a 5.45% decline amid a broader market rally. The downgrade to a Sell rating, combined with bearish technical momentum and a surge in bearish derivatives activity, underscores the challenges facing the stock. While short-term volatility and price pressure persist, the company’s strong long-term fundamentals and management efficiency provide a foundation for potential recovery. Market participants should remain vigilant, balancing technical caution with the stock’s historical resilience as they assess Mphasis’s evolving outlook.
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