What drove the sequential weakness in the 12-month order backlog, and what is the outlook for FY27 vs FY26?

The softness in 12-month backlog was caused by a delayed start to a large North America federal contract until post-midterms and slower consumption on a won UK contract. FY27 is still expected to be better than FY26 as UK and US deal momentum compensates for Middle East weakness.

Can you provide a bridge for the margin drop and outline how the 160 bps margin recovery will be achieved?

Wage increments and ESOPs impacted margins by 190 bps, and project mix changes requiring security-cleared onshore UK resources had a 200 bps drag, offset by 200 bps of AI-led internal restructuring efficiencies. Margin recovery will be driven by operational discipline and margin expansion in US and Middle East starting Q3.

Why has Healthcare been soft over the past year, and what is the rationale for expanding into Energy & Utilities?

UK Healthcare softened due to timing gaps between discovery/alpha phases and re-tendering for beta implementation, plus one offshore ramp-down; beta contract outcomes are expected in Q3/Q4. Energy & Utilities was entered using UK public sector framework bidding capabilities targeting arm's length bodies.

What is the status of the NHS renewal and Data Transformation contract?

A 6-month bridge contract is currently in place, and Mastek is actively bidding for the long-term renewal contract valued north of £100M, which will be an H2 event.

Mastek Q2 FY27 Earnings Call — Analysis (NSE: MASTEK)

Mastek delivered steady revenue growth crossing ₹1,000 Cr in Q2FY27 (+8.3% YoY, 2.4% QoQ CC), but EBITDA margin contracted 100 bps QoQ to 14.4% and 12-month order backlog fell 7.7% QoQ due to deferred project starts in the US and UK.

28 Oct 2026 · Analysis by Alpha Inflection

Result quality: stable — Results context unavailable. Management sentiment: neutral.

The take

Q2FY27 Revenue ₹1,018.7 Cr ( +8.3% YoY ) . But missed — Healthcare modernisation cycle .

Results

Revenue reached ₹1,018.7 Cr (+8.3% YoY, +2.4% QoQ CC) with EBITDA margin at 14.4% (-100 bps QoQ) and PAT at ₹105.7 Cr.

Financial highlights

Mastek Q2 FY27 reported figures
Metric	Value	Change	Basis
Revenue	₹1,018.7 Cr	+8.3%	yoy · Q2FY27
Revenue	₹1,018.7 Cr	+3.4%	sequential · Q2FY27 · 2.4% QoQ in constant currency
Operating EBITDA Margin	14.4%	-100bps	sequential · Q2FY27
Net Profit (PAT)	₹105.7 Cr		none · Q2FY27 · 10.3% of total income
Diluted EPS	₹33.9	+8.4%	yoy · Q2FY27
12-Month Order Backlog	$286.2M	-7.7%	sequential · Q2FY27 · +2.3% YoY in USD
Net Cash and Investments	₹582.7 Cr		point_in_time · Q2FY27 · Sep-2026
DSO	74 days	-1 day	sequential · Q2FY27

Guidance

Management aims to expand EBITDA margin by at least 160 bps in the medium term to return to ~16% and expects FY27 performance to exceed FY26 despite Middle East headwinds.

Key themes

AI-native transformation and UK public sector transition

Operational commentary

Order backlog declined 7.7% QoQ sequentially due to delayed start of a $25M North America federal government deal (held until post-midterms) and slower consumption on a UK public sector contract.
Entered into a strategic global partnership with Innovaccer to deliver AI transformation on contextual data platforms in Healthcare & Life Sciences.
Launched 'Service-as-a-software' offering combining enterprise application (Oracle/Salesforce) and data engineering capabilities; converted internal systems (CRM, procurement, recruitment, AP) and won initial external deals.
Won 3 new public sector frameworks in Energy & Utilities in the UK, replicating the public sector procurement playbook in arm's length commercial entities.
EBITDA margin faced headwinds from wage hikes/ESOPs (-190 bps) and UK onshore/security-cleared resource localization mix shift (-200 bps), partially counterbalanced by AI internal efficiencies (+200 bps).
Healthcare & Life Sciences vertical in the UK experienced a temporary lull due to the transition between alpha/discovery phases and beta recontracting; currently secured short-term bridge while bidding for a £100M+ large deal.

Analyst Q&A

Q. What drove the sequential weakness in the 12-month order backlog, and what is the outlook for FY27 vs FY26?
The softness in 12-month backlog was caused by a delayed start to a large North America federal contract until post-midterms and slower consumption on a won UK contract. FY27 is still expected to be better than FY26 as UK and US deal momentum compensates for Middle East weakness.
Q. Can you provide a bridge for the margin drop and outline how the 160 bps margin recovery will be achieved?
Wage increments and ESOPs impacted margins by 190 bps, and project mix changes requiring security-cleared onshore UK resources had a 200 bps drag, offset by 200 bps of AI-led internal restructuring efficiencies. Margin recovery will be driven by operational discipline and margin expansion in US and Middle East starting Q3.
Q. Why has Healthcare been soft over the past year, and what is the rationale for expanding into Energy & Utilities?
UK Healthcare softened due to timing gaps between discovery/alpha phases and re-tendering for beta implementation, plus one offshore ramp-down; beta contract outcomes are expected in Q3/Q4. Energy & Utilities was entered using UK public sector framework bidding capabilities targeting arm's length bodies.
Q. What is the status of the NHS renewal and Data Transformation contract?
A 6-month bridge contract is currently in place, and Mastek is actively bidding for the long-term renewal contract valued north of £100M, which will be an H2 event.

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