Summary
MPS Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026, 05:00 P.M. IST
Event Participants
Executives 6 Christine Miranda (SVP Research Solutions), David Goodman (Chief Growth Officer), Prarthana Agarwal (CFO), Rahul Arora (Chairman and CEO), Rodney Charles Beach (President Corporate Learning), Sreenivas TV (COO)
Analysts 6 Krushi Parekh, Madhur Rathi, Mahesh BP, Navid Virani, Parimal Mithani, Rahul Jain
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹182.5 crores | -2.7% QoQ; described as a “holding quarter” and transition period. |
| 9M Revenue | ₹563.2 crores | Positive YTD growth trajectory despite the Q3 dip. |
| EBITDA Margin | 31.6% | Operating within healthy range; supported by radical cost optimization and operating leverage. |
| EPS (9M) | - | Management guided to comfortably surpass ₹100 EPS for full FY26. |
| Education Revenue | ₹[Not Disclosed] | +11.3% YoY; normalized after 50% growth in H1 FY26. |
| Education EBITDA Margin | 40.8% | Expanded via high-stakes digital and accessibility conversion projects. |
| Research Revenue Share | 61.1% | Anchor segment; 16.2% organic growth (ex-AJE) in 9M FY26. |
| Net Worth/Cash | - | ₹138.5 crores ($16.5M) committed for Unbound Medicine acquisition via debt/cash mix. |
Geographic & Segment Commentary
- Education Solutions: This segment grew 38% in 9M FY26, driven by major K-12 and Higher Education contracts. The focus is shifting toward AI-assisted production and certified accessible formats, with a new 7-figure annual contract set to ramp up in Q4 FY26.
- Research Solutions: Contributing over 60% of revenue, the segment saw 16.2% organic growth (excluding AJE). Strategic focus includes transitioning to AI-powered workflows, scaling DigiCorePro, and reducing dependency on third-party platforms to ensure non-linear growth.
- Corporate Learning: Experienced a significant pullback as management proactively moved away from low-margin legacy work. The segment is being consolidated under a single global leadership to pivot toward managed learning services and high-end AR/VR/AI agentic bots.
- AJE (B2C/B2B): Continued to face revenue pressure but management expects the decline to stall in FY27. Growth is expected from new B2P (Business to Publisher) preferred vendor status and competitive pricing for AI-enabled editing services.
Company-Specific & Strategic Commentary
- Unbound Medicine Acquisition: MPS entered a definitive agreement to acquire 100% of Unbound Medicine for $16.5 million. The deal brings high-margin, subscription-based recurring revenue (97% retention) and deep entry into the US/Canada medical and nursing school ecosystems.
- “Andon Cord” Initiative: CEO Rahul Arora initiated a radical cost optimization project in Q3 to “crush” non-core expenses. This surgical efficiency drive aims to prepare the balance sheet for the Unbound integration and further expand margins.
- AI Integration: The company views AI as a tool for market consolidation. While AJE (B2C) saw disruption, the B2B segments are leveraging AI to win large-scale translation and production contracts from smaller players who cannot compete on tech-enabled efficiency.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EPS | > ₹100 for FY26 | Conservative target; includes a -₹3.5 per share hit from New Labour Code adjustments. |
| AJE Revenue | Stable for FY27 | Expected to stall its decline due to new B2B publisher partnerships. |
| Education Growth | Double-Digit for FY27 | Driven by long-term 7-figure contracts and accessibility service lines. |
| Corporate Learning | Return to Growth FY27 | Shift from one-off projects to “Managed Learning Services” model. |
Risks & Constraints
| Risk | Context |
|---|---|
| AJE Volatility | The B2C segment has been impacted by AI-driven competition; mitigation involves shifting to B2B and launching the Rubriq AI model. |
| Corporate Demand | Segment demand has been “patchy” and legacy work is being shed, leading to near-term revenue contraction. |
| Regulatory/Labour Code | A one-time impact of ₹3.5 per share is expected due to New Labour Code related adjustments. |
| Integration Risk | Merging three regional silos in Corporate Learning while integrating the Unbound acquisition requires significant management bandwidth. |
Q&A Highlights
Education Performance
- Question: Is the moderation in Education growth a trend or a one-off? (Rahul Jain)
- Answer: It is a singular, one-off quarter due to project timing; year-on-year growth remains double-digit with a new 7-figure contract starting in Q4 (David Goodman/Rahul Arora).
M&A Rationale & Funding
- Question: How will Unbound Medicine be funded and what is its business model? (Parimal Mithani/Rahul Jain)
- Answer: Funding will involve debt; details to follow in disclosures. The model is B2B subscription-led focusing on medical/nursing schools with high institutional stickiness (Rahul Arora).
AI Impact & Moats
- Question: How does AI impact the long-term longevity of your cash flows? (Mahesh BP/Vikas Mistry)
- Answer: Moat is built on domain expertise + technology. In medical fields (Unbound), LLMs hallucinate; MPS provides legally indemnified, peer-reviewed content that AI cannot replicate safely (Rahul Arora/Sreenivas TV).
EPS Target Clarification
- Question: Why guide for ₹100 EPS when TTM was already ₹104? (Madhur Rathi)
- Answer: We prefer conservative guidance. The target accounts for a ₹3.5 per share exceptional hit from the New Labour Code (Rahul Arora/Prarthana Agarwal).
Key Takeaway
MPS Limited characterized Q3 FY26 as a “disciplined reset” and a tactical “speed bump” while navigating a transition toward a platform-led organization. Total revenue for the quarter stood at ₹182.5 crores with a healthy 31.6% EBITDA margin, supported by a radical cost-optimization drive. The company’s strategic highlight was the $16.5 million acquisition of Unbound Medicine, which provides entry into the resilient, high-margin medical education subscription market with 97% client retention. While Corporate Learning faced a revenue pullback due to the shedding of low-margin legacy business, Research and Education segments remain anchors, with Education expected to return to robust growth in Q4. Management remains confident in surpassing a full-year EPS of ₹100 despite one-time regulatory headwinds. Looking ahead, the integration of Unbound and a shift toward “Managed Learning Services” are expected to drive exceptional performance in FY27.
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