Mphasis Ltd Sees Sharp Open Interest Surge Amidst Weak Price Action

Open Interest and Volume Dynamics

On 24 Feb 2026, Mphasis recorded an open interest (OI) of 35,134 contracts in its derivatives, up from 31,712 contracts previously, marking an increase of 3,422 contracts or 10.79%. This rise in OI is accompanied by a futures trading volume of 26,714 contracts, reflecting robust participation in the derivatives market. The combined futures and options value stands at approximately ₹11,675.8 crores, with futures alone accounting for ₹510.3 crores, underscoring significant liquidity and investor interest.

Such a surge in open interest typically indicates fresh positions being established rather than existing ones being squared off. Given the concurrent increase in volume, it suggests that market participants are actively taking new stances on Mphasis, potentially anticipating meaningful price movements in the near term.

Price Performance and Technical Context

Despite the increased derivatives activity, Mphasis’s spot price has been under pressure. The stock has declined for five consecutive sessions, losing 9.78% over this period. On 24 Feb, it opened with a gap down of 3.45% and touched an intraday low of ₹2,222.10, down 3.8% from the previous close. Notably, Mphasis is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a sustained bearish trend.

In comparison, the broader IT - Software sector fell by 4.64% on the same day, while the Sensex declined by 1.14%, indicating that Mphasis is underperforming both its sector and the benchmark index. This relative weakness, combined with rising open interest, points to a market consensus leaning towards further downside or at least increased volatility.

Market Positioning and Investor Behaviour

The surge in open interest alongside rising volumes suggests that traders are actively positioning themselves in the derivatives market. Given the stock’s recent price weakness, it is plausible that a significant portion of this activity represents bearish bets, such as increased short positions or put option buying, aimed at capitalising on further declines.

Supporting this view is the sharp increase in delivery volumes, which rose by 99.13% to 4.73 lakh shares on 23 Feb compared to the five-day average. This heightened investor participation in the cash segment indicates that institutional and retail investors alike are adjusting their holdings, possibly reducing exposure or hedging existing positions.

Liquidity metrics further reinforce the stock’s tradability, with the average traded value supporting a trade size of approximately ₹2.9 crores, ensuring that large trades can be executed without significant market impact.

Mojo Score and Analyst Ratings

Mphasis currently holds a Mojo Score of 38.0, categorised as a Sell rating, a downgrade from its previous Hold status as of 1 Feb 2026. This downgrade reflects deteriorating fundamentals or technical outlook as assessed by MarketsMOJO’s proprietary scoring system. The company’s market cap grade is 2, indicating mid-cap status with moderate liquidity and market presence.

The downgrade aligns with the stock’s recent price underperformance and bearish technical signals. Investors should note that the current sentiment is cautious, with the potential for further downside risk unless a clear reversal pattern emerges.

Sectoral and Market Context

The IT - Software sector has been under pressure recently, with a 4.64% decline on the day of analysis. Mphasis’s sharper fall relative to the sector suggests company-specific challenges or profit-taking. The broader market, represented by the Sensex, has been more resilient, declining only 1.14%, highlighting the sector’s vulnerability amid macroeconomic or sector-specific headwinds.

Investors should consider these broader trends when evaluating Mphasis, as sectoral weakness can exacerbate stock-specific declines, while any sectoral recovery could provide a tailwind.

Potential Directional Bets and Outlook

The combination of rising open interest, increased volumes, and falling prices typically signals that market participants are positioning for continued volatility or a bearish trend. The derivatives market activity suggests that traders are either initiating fresh short positions or buying protective puts to hedge against further downside.

However, the elevated delivery volumes indicate that some investors may be exiting or reducing exposure, which could eventually lead to a stabilisation if selling pressure abates. The stock’s liquidity profile supports active trading, allowing nimble investors to capitalise on short-term price swings.

Given the current technical and fundamental backdrop, cautious investors may prefer to await confirmation of a trend reversal or improved sectoral conditions before increasing exposure. Conversely, aggressive traders might explore short-term bearish strategies aligned with the derivatives market positioning.

Conclusion

Mphasis Ltd.’s recent surge in open interest and trading volumes in the derivatives market, set against a backdrop of sustained price declines and technical weakness, signals a market bracing for further volatility or downside. The downgrade to a Sell rating by MarketsMOJO and the stock’s underperformance relative to its sector reinforce a cautious outlook.

Investors should closely monitor open interest trends, volume patterns, and sectoral developments to gauge the evolving market sentiment. While the derivatives activity suggests increased bearish positioning, the elevated delivery volumes and liquidity provide opportunities for both risk management and tactical trading.

Ultimately, Mphasis remains a stock to watch carefully, with current signals favouring prudence and selective engagement based on risk appetite and market conditions.

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