SYNOPSIS: Stock declined after mixed Q4 results as margin pressure and lower guidance offset strong order book growth and profit rise, raising concerns over near-term profitability despite improving demand visibility.
During Monday’s trading session, shares of an AI-first, digital engineering and cloud transformation partner tumbled around 5 percent on BSE after reporting mixed Q4 FY26 results, following the announcement of mixed Q4 FY26 and FY26 results and a downward revision in EBITDA margin guidance for FY27.
With a market cap of Rs. 5,220 crores, shares of Mastek Limited were trading in the red at Rs. 1,684.05 on BSE, down by over 3 percent, compared to its previous closing price of Rs. 1,744.9. The stock has delivered negative returns of over 27 percent in the last one year, but has gained by around 16 percent in one month.
Financial Performance Q4 FY26
Mastek Limited announced its financial results for Q4 FY26 as well as the full financial year ended on 31st March 2026 after market hours on Friday, as per its latest regulatory filings with the stock exchanges.
For Q4 FY26, the company posted consolidated revenue from operations of Rs. 938 crores, reflecting a sequential growth of around 4 percent, compared to Rs. 906 crores in Q3 FY26. On a year-on-year basis, revenue increased by nearly 4 percent from Rs. 905 crores recorded in Q4 FY25. The steady momentum was supported by a 24.4 percent YoY growth in its 12-month order backlog, driven by continued strength in the UK and US markets, which also enhances revenue visibility going forward. For the full year FY26, revenue stood at Rs. 3,699 crores, reflecting a growth of over 7 percent YoY from Rs. 3,455 crores in FY25.
At the profitability level, net profit for the quarter came in at Rs. 106 crores, marking a marginal decline of about 2 percent QoQ from Rs. 108 crores in Q3 FY26. However, on a year-on-year basis, profit increased significantly by nearly 31 percent from Rs. 81 crores in Q4 FY25. For FY26, PAT stood at Rs. 404 crores, up by over 7 percent YoY from Rs. 376 crores reported in FY25.
Operational performance remained mixed during the quarter. EBITDA stood at Rs. 150.7 crores in Q4 FY26, reflecting a slight decline of around 1 percent QoQ from Rs. 152 crores in Q3 FY26, but nearly 9 percent YoY growth from Rs. 139 crores in Q4 FY25. EBITDA margins came in at 16.1 percent, contracting by 71 basis points sequentially from 16.8 percent, but improving by 75 basis points on a year-on-year basis from 15.3 percent.
On a full-year basis, EBITDA remained at Rs. 585.6 crores, marking a growth of around 7 percent YoY, while EBITDA margins remained largely stable, improving marginally by 2 bps to 15.8 percent.
For Q4 FY26, the company’s revenue by service line was primarily driven by Digital & Application Engineering, which contributed 50.8 percent to total revenues. Oracle Cloud & Enterprise Apps accounted for 27.2 percent, followed by Data, Automation and AI at 12.4 percent. Meanwhile, Digital Commerce & Experience contributed 9.6 percent to the overall revenue mix. Meanwhile, the company’s Board has recommended a final dividend of Rs. 16 per share, aggregating to 480 percent for the year (vs. 460 percent in FY25).
Additional Highlights, Order Book & More:
Mastek Limited continued to witness strong growth in its UK business, which expanded by 21.8 percent in INR terms during FY26. This growth was primarily driven by robust momentum in the healthcare segment, which recorded an exceptional 95 percent year-on-year increase, along with new client acquisitions in the financial services space.
In North America, early indicators have started to improve, supported by a renewed focus on execution and leadership strengthening. While the region remains in a recovery phase, a gradually improving deal pipeline provides visibility for a steady recovery in the coming periods.
The company’s “Lead with AI” strategy has begun delivering tangible results. During Q4 FY26, the company closed over 25 AI-led deals, taking the total number of such deals to more than 85 for the full year. This focus on AI-driven solutions contributed to a 12 percent improvement in revenue per employee and supported the company in maintaining EBITDA margins at 16.1 percent.
On the client front, the company added 12 new clients during Q4 FY26. However, the total active client base stood at 326, slightly lower than 333 in the previous quarter, indicating some rationalisation in the client portfolio.
The company’s 12-month order backlog stood at Rs. 2,849.2 crores ($300.4 million) as of 31st March 2026, reflecting a growth of 24.4 percent year-on-year from ~Rs. 2,291 crores in Q4 FY25. On a sequential basis, the order book grew by 7.2 percent from Rs. 2,658.5 crores in Q3 FY26, indicating sustained deal momentum and improving revenue visibility.
From a liquidity perspective, total cash, cash equivalents, and investments in mutual funds stood at Rs. 938.5 crores as of March 31, 2026, compared to Rs. 798.8 crores as of December 31, 2025, reflecting a strengthening balance sheet position.
According to media reports, the company’s management has revised its EBITDA margin guidance downward for FY27, citing rising competitive intensity and cost pressures. The revised margin guidance now stands at 16-16.5 percent, compared to earlier expectations of around 17 percent.
The moderation in margin outlook is attributed to factors such as wage hikes and pricing pressures, which had an estimated impact of around 1-1.5 percent on margins during the March quarter. Despite this, the management expects margins to remain broadly stable within the revised range while navigating ongoing demand and pricing challenges.
Mastek Limited is engaged in the business of offering business and technology services, including application development, application maintenance, business intelligence and data warehousing, testing & assurance and legacy modernisation.
The company is a global provider of enterprise AI, digital, and cloud services, with a presence in over 40 countries and a skilled workforce of close to 5,000 employees.
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