Mastek Q1 FY26: UK & Europe strength drives growth

Mastek's Q1 FY26 results demonstrate that the company's strategic positioning is delivering strong returns. The company achieved 12.5% year-on-year revenue growth to Rs 914.7 crore, with constant currency growth of 6.8% - a performance that has seen the share price rise over 7% during today’s trading.

Mastek's UK & Europe business now represents 63.8% of group revenues, up from 56.7% a year ago. The company has doubled down on its UK strategy, demonstrating strength in' secure government services' and healthcare, where the UK business has secured multiple strategic wins whilst moving up the value chain in critical infrastructure projects. Demonstrating this, wins in the quarter include a biometrics platform extension for a central government agency, a data modernisation project for a central bank, and core CRM components for a healthcare authority.

The AI story is gaining substance. Over 10 deals closed in the quarter spanning generative and agentic AI solutions. The OpenAna partnership (announced in February – see Mastek partners with AI startup OpenAna | TechMarketView), which sees Mastek benefit from the Ana platform and its autonomous management of the software development lifecycle from design to deployment, is particularly significant given the potential for AI-driven automation in addressing technology debt. With Data, Automation & AI services now representing 12.2% of revenues globally (up from 8.8% a year ago), the numbers show genuine commercial traction.

Some metrics warrant a little attention, such as the modest Group sequential revenue growth of just 1% in rupee terms (a decline of 1.1% in USD terms). However, this masks geographic variations, as highlighted by strength in the UK & Europe (+27% year-on-year growth) but a sluggish (+2%) US performance.

Also, operating EBITDA margins dipped to 15.0% from 15.3% quarter-on-quarter, but this was attributed to talent investments – a move that is proving valuable in boosting the company’s Data and AI business. Meanwhile, active clients dropped from 348 to 323, continuing a long-term trend as Mastek focuses on deeper relationships with fewer, larger clients - a strategy that is validated by the company maintaining 75 clients with annual billing exceeding $1 million.

CEO Umang Nahata's reference to a "dynamic" external environment sounds like corporate-speak for continuing uncertainty. However, despite the US business facing headwinds in Q1, management points to strong global pipeline and order backlog as reassurance. The 12-month order backlog grew 8.3% year-on-year to Rs 2,347.9 crore. The UK business is firing on multiple cylinders, particularly in healthcare where Mastek's domain expertise is creating genuine differentiation.

Mastek continues to show strong commitment to the UK market with its local presence deepening. With healthcare now 25% of global revenues vs. 17.8% a year ago, and the UK leading growth, it is clear that Mastek UK's strategic focus is bearing fruit.

Posted by: Georgina O'Toole at 10:04

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