Mastek (MASTEK) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue reached ₹914.7 crore, up 12.5% year-on-year and 1% sequentially, with net profit at ₹92.1 crore, a 28.7% increase year-on-year, despite macro headwinds in key geographies.

• UK and Europe led growth with 27% year-on-year revenue increase, driven by health, BFSI, and secure government sectors, while US revenue was flat year-on-year with an 8.5% sequential decline.

• 12-month order backlog grew to $274 million (₹2,347.9 crore), up 3.5% quarter-on-quarter and 8.3% year-on-year.

• AI initiatives, including the launch of ADOPT.AI with 80+ agent assets and 100+ use cases, are gaining traction, especially in healthcare and testing automation.

• Total comprehensive income for the quarter reached ₹12,984 lakhs, boosted by foreign exchange gains.

Financial highlights

• Revenue from operations in Q1FY26 was $107.4 million, up 10.4% year-on-year and 2.6% sequentially; operating EBITDA margin stood at 15%, down 31 bps quarter-on-quarter.

• Net profit for the quarter was INR 92.1 crore, up 28.7% year-on-year and 13.5% quarter-on-quarter; PAT margin improved to 9.9%.

• Basic EPS increased to ₹29.7 from ₹23.2 year-over-year; diluted EPS was ₹29.50, up from ₹22.92 year-over-year.

• Cash and cash equivalents were INR 549 crore, down from INR 622 crore last quarter due to variable payouts and debt repayment.

• Other income rose sharply to ₹10.6 crore, up 195% sequentially.

Outlook and guidance

• Management expects continued robust growth in UK and Europe, leveraging government digital transformation and healthcare investments.

• US business is expected to recover in H2 FY26, with AI-led deals and restructuring efforts underway.

• EMEA will focus on profitable growth and healthcare expansion, leveraging Oracle-Cerner capabilities.

• Margin performance is expected to remain stable to slightly positive for FY26, with ongoing investments in workforce and technology.

• Forward-looking statements highlight risks from competition, pricing, technology, and regulatory changes.