MASTEK Q2 FY26 earnings call.
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Revenue
₹940 Cr
verified against source
Revenue YoY
8.4%
reported change
EBITDA
₹145.5 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Mastek reported steady Q2 FY26 results with operating revenue of ₹940 crore (up 8.4% YoY) and EBITDA of ₹145.5 crore (margin 15.5%, +50bps QoQ). PAT came in at ₹97.44 crore, declining 24% YoY due to an exceptional gain in the base quarter; on normalized basis, profit grew 14% YoY. The 12-month order backlog stood at $280 million (up 6.8% YoY), with strong deal wins including a $50M+ secured government services contract and $15M+ financial services AI modernization deal. UK remains the strongest geography driven by healthcare and government services, while North America is in investment phase targeting $28-30M run-rate for margin improvement. AI-driven efficiency gains are starting to reflect in improved revenue per resource, with management guiding for continued margin expansion. Macro uncertainties are causing decision delays and preference for shorter-duration contracts, but deal pipeline remains healthy. CFO transition expected next month introduces near-term execution risk.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects North America EBITDA margins to reach double-digit levels once the geography approaches $28-30 million revenue run-rate, up from current lower base. Investments are being held steady as the business scales.
- With ~dozen customer AI transformation roadmaps in progress, management anticipates entering execution phase for AI for business wave (delivering business transformation) in part of FY27 or early FY27.
- Management expressed confidence that operational efficiency focus and AI-driven improvements will drive continuous EBITDA margin expansion quarter-on-quarter going forward.
Risks flagged
- The CFO position remains vacant with a new candidate expected to join only next month. This creates a leadership gap during a critical growth phase, and the new CFO's strategic alignment remains unproven.
- A sizable contract in APAC was delivered but revenue could not be recognized (~₹4 crore impact) due to incomplete formal paperwork, highlighting execution risk in emerging markets. Management cited conservative approach but acknowledged revenue was earned.
- Clients in North America and UK private sector are increasingly opting for shorter-term contracts (6-12 months) instead of traditional 3-5 year deals, reducing forward revenue visibility and potentially impacting order book quality.
- Management acknowledged that efficiency gains from AI must be partially shared with customers to secure larger transformation deals, creating a trade-off between margin expansion and market share gains in the emerging AI services landscape.
Key quotes
- The AI for business wave is now starting to lead into...where customers are now very actively starting to ask for how could we help use AI as a technology to deliver business transformation. This I believe is going to be the biggest wave for the IT services industry over the last few decades and is going to significantly transform our industry.
- We have to demonstrate not just lift service but some real tangible benefit to our customers and therefore passing on a portion of our efficiencies back to them openly and transparently is going to be very important.
- As far as the UK business is concerned, our foundational strength is the long-term trusted relationship that we enjoy with the government...So our foundation is the long-term relationship with the customer.
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