Mphasis Ltd Sees Sharp Open Interest Surge Signalling Renewed Market Optimism

Open Interest and Volume Dynamics

The latest data reveals that Mphasis’s open interest (OI) in derivatives has risen sharply by 3,778 contracts, marking a 15.02% increase from the previous figure of 25,161 to 28,939. This substantial uptick in OI is accompanied by a robust trading volume of 23,058 contracts, underscoring active participation in the stock’s futures and options market.

In monetary terms, the futures segment alone accounted for a value of approximately ₹79,701.42 lakhs, while the options segment exhibited an even larger notional value of ₹10,241.39 crores. The combined derivatives turnover thus stands at ₹81,186.49 lakhs, reflecting significant liquidity and investor interest in Mphasis’s contracts.

Price Performance and Market Context

On the price front, Mphasis outperformed its sector peers by 0.61% on the day, registering a 1.17% gain compared to the sector’s 0.66% and the Sensex’s modest 0.22% rise. The stock touched an intraday high of ₹2,889.90, a 3.25% increase from its previous close, signalling a strong rebound after two consecutive days of decline.

Technical indicators show that the stock price remains above its 50-day, 100-day, and 200-day moving averages, indicating a sustained medium- to long-term uptrend. However, it is currently trading below its 5-day and 20-day moving averages, suggesting some short-term consolidation or profit booking.

Investor participation has surged notably, with delivery volumes on 21 January reaching 9.05 lakh shares, a remarkable 223.66% increase over the five-day average delivery volume. This spike in delivery volume points to genuine accumulation rather than speculative trading, reinforcing the bullish sentiment.

Market Positioning and Directional Bets

The sharp rise in open interest, coupled with increased volume and delivery participation, indicates that market participants are actively positioning themselves for a directional move in Mphasis. The 15% increase in OI suggests fresh long positions are being built, or existing shorts are being covered, both of which typically precede upward price momentum.

Given the stock’s recent price recovery and outperformance relative to its sector and benchmark indices, it is plausible that investors are anticipating positive catalysts or earnings momentum. The liquidity profile, with a tradable size of approximately ₹4.57 crore based on 2% of the five-day average traded value, supports the feasibility of sizeable trades without significant market impact.

Mojo Score Upgrade and Analyst Sentiment

Mphasis’s recent upgrade in its Mojo Grade from Hold to Buy, effective 19 January 2026, reflects improved fundamentals and positive market outlook. The company currently holds a Mojo Score of 72.0, signalling strong investment appeal within its sector. Despite a moderate Market Cap Grade of 2, the stock’s mid-cap status with a market capitalisation of ₹53,958.17 crore positions it well for growth and institutional interest.

Analysts note that the upgrade is supported by consistent earnings growth, robust order inflows, and favourable industry trends in software and consulting services. The stock’s ability to maintain price levels above key moving averages further bolsters the technical case for sustained gains.

Sectoral and Broader Market Comparison

Within the Computers - Software & Consulting sector, Mphasis’s outperformance relative to the sector index and Sensex highlights its relative strength. The sector’s 1-day return of 0.66% and Sensex’s 0.22% gain contrast with Mphasis’s 1.17% rise, underscoring its leadership in the current market phase.

This relative strength is particularly noteworthy given the broader market’s cautious stance amid global macroeconomic uncertainties. Mphasis’s ability to attract increased open interest and volume suggests that investors view it as a preferred proxy for growth and stability in the IT services space.

Implications for Investors and Traders

The surge in open interest and volume in Mphasis derivatives offers actionable insights for market participants. Traders may interpret the rising OI as a signal of building momentum and potential price appreciation, prompting them to consider long futures or call option strategies.

Meanwhile, investors should monitor the stock’s price action relative to short-term moving averages and delivery volumes to gauge the sustainability of the current rally. The combination of fundamental upgrades and technical strength provides a compelling case for accumulation, albeit with prudent risk management given recent short-term volatility.

Outlook and Conclusion

Mphasis Ltd.’s recent surge in open interest and volume in the derivatives market, combined with its price recovery and fundamental upgrade, paints a bullish picture for the stock in the near term. The increased investor participation and liquidity support the view that the market is positioning for further upside, potentially driven by positive earnings momentum and sector tailwinds.

However, short-term traders should remain cautious of the stock’s position below its 5-day and 20-day moving averages, which may indicate some consolidation or profit-taking. Long-term investors can take comfort from the company’s upgraded Mojo Grade and strong market capitalisation, which underpin its growth prospects in the competitive software and consulting industry.

Overall, Mphasis appears well poised to capitalise on favourable market conditions, making it a stock to watch closely for both traders and investors seeking exposure to India’s IT services sector.

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