Mastek Limited reported a 15% year-on-year increase in consolidated net profit to ₹105.9 crore for the quarter ended June 30, 2026, driven by strong demand for AI-led initiatives and robust performance in the UK and North America. Revenue from operations rose 7.7% to ₹985.3 crore, while the 12-month order backlog grew 25% year-on-year to ₹2,935.2 crore. Despite headwinds from geopolitical instability in the Middle East impacting collections and margins, management highlighted a positive demand cycle and secured over 40 new AI-related deals during the quarter.

The Board of Directors approved the unaudited consolidated financial results. The company’s operating EBITDA margin stood at 15.4%, down 71 basis points sequentially due to delayed collections in the Middle East and increased bench costs. However, the net cash and investment position improved by approximately ₹200 crore over the last two quarters to reach ₹945.4 crore as of June 30, 2026. Mastek also disclosed an income tax assessment for FY23 where the assessing officer added income of ₹91 crore on transfer pricing and ₹32.5 crore on domestic tax; the company has filed an appeal with the Commissioner of Income Tax Appeals.

Consolidated Financial Performance

Operational Highlights and Regional Performance

CEO Umang Nahata noted that the UK business grew 3% quarter-on-quarter in constant currency terms, supported by financial services and public sector wins. North America saw a 6.2% sequential revenue growth in rupee terms, bolstered by a $25 million AI-led Salesforce deal. Conversely, the Middle East faced severe headwinds due to the West Asia crisis, leading to unpredictable ramp-ups and collection delays.

Deepak Kedia, CFO, stated that collections amounted to $116 million, resulting in a Days Sales Outstanding (DSO) of 75 days, an increase of two days primarily due to geopolitical factors. The company paid ₹107 crore as variable pay to employees but still generated positive operating cash flow of nearly ₹27 crore. Utilization excluding trainees declined by 2% sequentially due to order pushouts in the Middle East.

Strategic Wins and Outlook

Mastek secured significant strategic engagements, including the $25 million AI transformation deal in North America and a digital transformation project for a major English council. The company was recognized as a Challenger in the Avasant Higher Education Digital Services 2026 RadarView. Management emphasized its shift towards becoming an AI transformation company, leveraging its data and engineering practices. Amit Gajwani joined as Chief Operating Officer to lead delivery transformations. Looking ahead, management expects FY27 performance to be better than FY26, with North America turning into a growth engine in the second half of the year.

What the Numbers Show

The divergence between strong top-line growth (7.7% YoY) and margin compression (EBITDA down 71 bps sequentially) highlights the immediate impact of Middle East volatility on profitability. While the backlog growth of 25% YoY suggests strong future revenue visibility, the reliance on large, multi-year deals like the $25 million Salesforce contract indicates a strategic pivot towards higher-value, longer-term engagements to stabilize margins and reduce dependency on spot billing.

HDFC Mutual Fund has increased its shareholding in Mastek Ltd to 5.06% following the acquisition of 86,746 equity shares. The transaction, executed through the open market on July 15, 2026, raises the fund's total stake to 15,68,910 equity shares. This move triggers a disclosure requirement under Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Prior to this acquisition, the fund held 14,82,164 shares, representing 4.78% of the company's paid-up equity share capital. The additional purchase of 86,746 shares, accounting for 0.28% of the capital, pushed the total holding past the 5% threshold. The disclosure was submitted to the stock exchanges on July 20, 2026.

The acquisition was carried out by HDFC Asset Management Company Limited, acting as the investment manager for HDFC Mutual Fund. Specifically, the shares were acquired by the HDFC Small Cap Fund. The acquirer clarified that it does not belong to the promoter or promoter group of the target company.

Shareholding Details

The following table outlines the changes in shareholding following the transaction:

The paid-up equity share capital of Mastek Ltd is reported as Rs. 15,50,03,910, comprising 3,10,00,782 equity shares of Rs. 5 each. The total diluted share capital remains unchanged as no convertible securities were involved in this transaction. The company's paid-up share capital was recorded as 3,10,02,407 equity shares as of July 20, 2026.