Mastek Ltd Q2FY26 – From Oracle Clouds to GenAI Thunderstorms: ₹940 Cr Revenue, ₹97 Cr PAT, and 25 AI Deals Later… Still the Underdog of Indian IT
1. At a Glance
Ladies and gentlemen, meet Mastek Ltd (₹2,065 CMP, Market Cap ₹6,396 Cr) — the IT stock that once had a cult following among midcap believers but currently feels like that overqualified coder who got ghosted by a startup. The company just dropped its Q2FY26 numbers: Revenue ₹940.4 Cr, EBITDA ₹145.5 Cr, and PAT ₹97.4 Cr — flat as a dosa on the growth front but sprinkled with AI masala.
Over the past 3 months, the stock is down ~19%, over 12 months down 27%, which makes you wonder — is Mastek an “AI transformation leader” or an “AI waiting room subscriber”? With a P/E of 17.4, ROE of 16.1%, and ROCE of 17.3%, the valuation looks decent, but the street clearly doesn’t swipe right on this one.
If IT was a Bollywood film, Mastek is that underrated supporting actor — brilliant in scenes, missing in posters.
2. Introduction
Once upon a punchline, there was a company founded in 1982, before personal computers were even common in Indian homes. Mastek Ltd — short for “Management and Software Technology” — started as an IT service provider when floppy disks were still cool. Fast forward 40 years, and the company now claims to be a “Digital Transformation Partner”. Basically, the same job, fancier resume.
In a world where TCS builds skyscrapers of revenue and Infosys paints balance sheets in blue, Mastek is like that architect who focuses on boutique houses — precise, pretty, but not everyone knows the address.
The last few years have been wild. The company scaled its US revenue from 18% to 28%, added GenAI solutions (iConniX), and now flaunts partnerships with Oracle, Microsoft, AWS, Salesforce, and Snowflake. That’s like having the Avengers on speed dial.
But here’s the twist: Despite strong partnerships, the order book of ₹2,139 Cr barely moved YoY. So, while Mastek keeps winning design awards, its growth engine occasionally forgets the accelerator pedal.
Still, this firm has grit. It’s survived tech winters, digital summers, and even CEO monsoons — Umang Nahata took charge in Jan 2025. Let’s see if he can reboot the legacy code of Mastek 4.0.
3. Business Model – WTF Do They Even Do?
Alright, let’s break down the spaghetti of services Mastek sells.
Mastek doesn’t sell “products” like your fancy AI startups. It sells brainpower — services like:
Application Development and Maintenance (aka coding old stuff better),
Business Intelligence (aka Excel sheets on steroids),
Testing & Assurance (finding bugs nobody wants to admit exist),
Legacy Modernisation (the IT version of anti-aging cream).
In May 2024, it launched iConniX, its GenAI-enabled portfolio — 120 AI assets, 4 platforms, and blueprints across industries. Fancy buzzwords, sure. But the key here is execution — AI decks don’t pay salaries, projects do.
Service mix in Q3FY25:
Digital, Application & Engineering: 49%
Oracle Cloud & Enterprise Apps: 30%
Digital Commerce & Experience: 14%
Data, Automation & AI: 7%
That’s a balanced IT thali — with Digital Engineering as the dal and Oracle Cloud as the sabzi.
Industry mix shows 39% revenue from Government projects (mostly UK public services). Basically, when the NHS catches a cold, Mastek sneezes revenue. Health & Life Sciences add 22%, and Manufacturing, Retail, and BFSI round off the plate.
Geographically, the UK remains bae (59% revenue), but the US is catching up fast — 28% now vs 18% in FY22. If you’re reading this in London, some part of your digital tax form is probably Mastek-coded.
So, in short — Mastek is not a flashy tech unicorn; it’s a dependable IT mule. But with AI reins now attached.
4. Financials Overview
Metric
Q2FY26 (Latest)
Q2FY25 (YoY)
Q1FY26 (QoQ)
YoY %
QoQ %
Revenue
₹940 Cr
₹867 Cr
₹915 Cr
8.4%
2.7%
EBITDA
₹145.5 Cr
₹143 Cr
₹137 Cr
1.7%
6.2%
PAT
₹97.4 Cr
₹129 Cr
₹92 Cr
-24.5%
5.9%
EPS (₹)
31.5
41.7
29.8
-24.5%
5.7%
Commentary: Flat revenue, weaker PAT, stronger sarcasm. Margins have plateaued around 15% EBITDA, but PAT fell sharply YoY thanks to higher costs and a less generous tax line. On an annualised basis, EPS stands at ~₹126, giving a P/E of 16–17x — not bad for an AI-fueled midcap. But in this market, “not bad” often means “ignored.”
5. Valuation Discussion – Fair Value Range Only
Let’s pull out the calculator that survived 12 earnings seasons.
a) P/E Method
Annualised EPS: ₹126
Industry Average P/E: 30x
Mastek historical P/E range: 15x–22x → Fair Value Range = ₹1,890 to ₹2,770
b) EV/EBITDA Method
EBITDA FY25 (annualised): ₹562 Cr
EV = ₹6,418 Cr
EV/EBITDA = 11.4x Peers average 18–22x. → Fair Value Range (at 12–18x) = ₹2,000–₹3,000 per share
c) DCF (Discounted Cash Flow)
Assume:
FCF CAGR 10% for 5 years,
Terminal growth 3%,
WACC 11%. → Intrinsic Range = ₹1,950–₹2,650
Final Educational Fair Value Range: ₹1,900–₹2,800 per share.
📜 Disclaimer: This range is for educational purposes only. Not investment advice. Please consult your inner conscience and maybe your CA.
6. What’s Cooking – News, Triggers, Drama
Oh boy, where to start. Mastek’s newsroom has been busier than a hackathon.
Oct 2025: 25+ AI deals inked this quarter; 13 new clients added. Translation: “We are relevant again.”
Jun 2025: Won a £400k NHS England cybersecurity training contract. Because when Britain sneezes, Indian IT sells tissues.
May 2025: Partnered with Zulekha Healthcare and Air Niugini for Oracle Cloud deployments — clearly Mastek loves flying and healing people.
Feb 2025: Secured $85 million contracts from UK public service. NHS and local councils are practically funding their payroll now.
