Financial Performance Highlights

  • Revenue: $107.3 million for Q2FY27, representing 2.4% quarter-on-quarter growth in constant currency terms
  • Rupee Revenue: ₹1,018.7 crore, sequential growth of 3.4% and year-on-year growth of 8.3%
  • EBITDA Margin: 14.4%, down 100 basis points from Q1FY27
  • PAT: ₹105.7 crore (10.3% of total income)
  • EPS: Basic EPS of ₹34.1 (up 8.3% YoY), Diluted EPS of ₹33.9 (up 8.4% YoY)
  • Order Backlog: 12-month executable order backlog of $286.2 million, representing sequential decline of 7.7% but YoY growth of 2.3% in USD terms and 10.4% in INR terms

Geographical Performance

UK-Europe Business:

  • Delivered 4.1% revenue growth in Q2
  • Financial Services grew by more than 16% in the quarter
  • Public sector remained stable with decent growth
  • Healthcare & Life Sciences lagged due to right-shifting in project starts
  • Landed three new frameworks in energy and utilities sector
  • Change in UK Prime Minister led to policy uncertainty affecting some contract decisions

North America Business:

  • Strong deal momentum with order backlog growing more than 50% year-on-year
  • Focus on Healthcare & Life Sciences, retail, and manufacturing verticals
  • Significant AI-native transformation deals in pipeline

APAC and Middle East:

  • Uncertainty continues in the market, particularly in Saudi Arabia
  • Some old standing contracts signed leading to decent bounce back in revenue

Strategic Initiatives and AI Transformation

Mastek is transforming into an AI-native organization with three core pillars:

1. Strategic Partnerships:

  • Signed strategic partnership with Innovaccer, a market leader in Healthcare & Life Sciences contextual data
  • Partnership aims to position Mastek and Innovaccer as leading providers of AI transformation services in healthcare globally

2. Service-as-a-software Offerings:

  • New offering combining enterprise applications (Oracle, Salesforce) with engineering and data domain expertise
  • Internally implemented across CRM, procurement, recruitment, accounts payable, and expense systems
  • Delivered savings in subscription costs and improved business outcomes
  • Already closed first few deals in market

3. AI Foundation:

  • Added cyber security component to AI foundation
  • Investments in public sector market started bearing results with first significant wins in Cyber for AI space

Deal Highlights

Company closed 53 AI deals in Q2, representing 45% of total order book:

1. Senior Care Skilled Nursing Facility: Multi-million dollar Service-as-a-software deal in North America replacing core SaaS platform

2. Life Sciences Company: $10M+ transaction in dental technologies using AI-led productivity improvements to replace incumbent

3. UK Central Government: Multi-year, multi-million dollar cybersecurity deal for cyber assurance

4. Police Department: Process transformation deal on Oracle platform using AI-agentic solutions

5. Managed Services Deal: AI productivity offering replacing incumbent using ADOPT AI platform

6. APAC Healthcare Partner: Healthcare & Life Sciences process transformation modernizing legacy applications

Financial Details

Margin Analysis:

  • EBITDA margin decline of 100 bps primarily due to salary hikes and ESOPs (190 bps impact)
  • Margin pressure from mix change toward low-margin projects requiring sovereignty and security-cleared resources (200 bps impact)
  • AI-led efficiencies provided 200 bps improvement
  • Net impact of 150-160 bps drop from previous 16% margin level

Cash Position:

  • Collected $120 million from customers in Q2
  • DSO of 74 days (decreased by 1 day)
  • Closing cash and investment balance net of debt: ₹582.7 crore
  • Paid dividend of ₹50 crore plus loan repayment of ₹55 crore
  • Added ₹36 crore to net cash and investments despite outflows

Operational Metrics:

  • Utilization including trainees: down 0.8% sequentially due to investments in domain resources
  • Added 18 new customers (vs 13 in previous quarter)
  • Closing headcount: 4,810 (reduction of 87 due to workforce restructuring and onsite/offshore mix change)
  • Attrition rate: 15.2% (down from 16.4% last quarter)

Guidance and Outlook

  • Management expects H2 performance to continue doing well
  • Confident that FY27 will be better than FY26 despite geopolitical uncertainties
  • Targeting medium-term EBITDA margin improvement of at least 160 bps
  • Velocity of margin improvement dependent on macro and geopolitical factors
  • UK budget announcement expected to provide clarity on public sector spending

Investor Communication Changes

Company made changes to Factsheet to provide more meaningful business representation:

  • Active clients during preceding 12 months
  • Active clients during the quarter
  • Forbes 1000 clients
  • Top 5 and Top 10 clients
  • Repeat business metrics
  • Employee metrics by segment and time