MASTEK Q1 FY27: AI deals lift revenue to ₹985 crore

Q1 FY27 in focus: growth with an AI-led pipeline

Mastek Ltd (NSE: MASTEK) used its Q1 FY27 earnings call on July 22, 2026 to outline a quarter of steady execution, stronger deal momentum, and a rising order backlog. Management said demand sentiment remained positive, with new opportunities increasingly linked to AI transformation programs. The company positioned the quarter as “predictable performance and growth,” supported by an expanding order book and improving collections.

The quarter also highlighted a clear split in regional performance. The UK and North America businesses delivered sequential growth, while the Middle East faced pressure amid geopolitical instability. Investors appeared to focus on margin and execution risks even as revenue and backlog improved. Mastek’s stock fell 2.66% to ₹1,700.1 after the results, as per the market snapshot shared alongside the earnings summary.

What management said: AI-led deal momentum

CEO Umang Nada said Mastek saw “good demand in new AI-led deals” during the quarter. The company closed 40+ new opportunities in Q1 FY27 that were backed by AI-led initiatives. Alongside this, management pointed to stronger order book performance, with the 12-month order backlog up 25% year-on-year in rupee terms and 13% in constant currency terms.

The earnings commentary also framed AI as a key driver of new demand formation rather than only an incremental delivery tool. Mastek highlighted its intent to position itself as an “AI transformation company,” leveraging its enterprise application transformation business and data practice.

Revenue growth: ₹985.3 crore and 5% QoQ expansion

CFO Deepak Khedia reported Q1 FY27 consolidated revenue of $104.8 million, up 1.2% sequentially. In rupee terms, revenue came in at ₹985.3 crore, reflecting 5% quarter-on-quarter growth and 7.7% year-on-year growth. On a constant currency basis, the company stated revenue grew 1.8% sequentially.

The company also referenced currency effects in its investor summary, noting that dollar revenue showed a year-on-year decline due to currency headwinds. Mastek did not announce any new formal guidance in the shared text, but the earnings summary stated FY27 performance was projected to surpass FY26, supported by backlog execution and AI-led demand.

Margins and profitability: EBITDA at 15.4%, PAT at ₹105.9 crore

Mastek reported operating EBITDA margin of 15.4% in Q1 FY27. In rupee terms, operating EBITDA was ₹151.4 crore as per the earnings summary, with 10.2% year-on-year growth. Profit after tax (PAT) stood at ₹105.9 crore, equal to 10.6% of total income, and was described as up 15% year-on-year in the summary.

The company also disclosed earnings per share (EPS) expansion. Basic EPS was ₹34.2, up 14.8% year-on-year, while diluted EPS was ₹33.9, up 15% year-on-year.

Order backlog: $110 million and strong AI order book traction

A key operational datapoint was the 12-month order backlog of $110 million. Management said this was up 3.2% sequentially and 13.3% year-on-year in USD terms. In rupee terms, the company indicated a 25% year-on-year rise, and the investor summary quantified the backlog at ₹2,935.2 crore.

Separately, Mastek’s AI order book was reported at $14.0 million, more than doubling from $17.5 million in the prior quarter, as per the investor presentation summary. North America’s momentum was also linked to a $15 million AI transformation deal in Salesforce, including Salesforce Agentforce, which management described as one of its largest deals in recent quarters.

Geography update: UK steady, North America improving, Middle East pressured

Mastek said both the UK and North America geographies grew sequentially in Q1 FY27. The UK business grew 3% quarter-on-quarter in constant currency terms and was described as the company’s “strong foundation and foothold.” The CFO also noted the UK continued to deliver EBIT of almost 20%.

In North America, management said performance improved for the third consecutive quarter, supported by the large AI deal referenced in the call. North America also reported a stronger order book, with total backlog position improving 29.8% sequentially and 23.5% year-on-year.

In contrast, the Middle East business faced “severe headwinds” due to geopolitical instability, affecting predictability and performance. The CFO also referred to geopolitical tensions impacting operations, including delayed collections.

Cash flow and collections: DSO at 75 days

Mastek reported cash collections of $116 million during Q1 FY27, leading to DSO of 75 days. The company said DSO increased by 2 days, driven by a collection pushout of almost $1.5 million into early July and geopolitical tensions in Armenia.

Despite paying ₹107 crore as variable pay to employees, Mastek said it generated positive operating cash of about ₹27 crore. The company also stated that over the last two quarters, net cash and investment position improved by almost ₹200 crore. In the earnings summary, cash and cash equivalents were reported at ₹945.4 crore.

Operational metrics: hiring, attrition, and new customers

Mastek added 13 new customers during the quarter. Headcount increased to 4,897, up by 167 employees sequentially. Attrition was reported at 16.4%, down from 17.4%.

These metrics were presented alongside the company’s view that it continues to invest in AI transformation and leadership. However, the call also flagged cost elements that investors may track in coming quarters.

Watchlist items: subcontractors, ESOP costs, and client concentration

The transcript summary flagged that subcontractor costs remained high at 18.5% of total revenue, which could influence margins. The company also anticipated an EBITDA impact from ESOP costs, estimated at $1.4 million to $1.5 million per quarter.

Another point was a decline in revenue from the top five clients, attributed to a timing gap in project transitions within the healthcare sector. In addition, the company flagged that political changes in the UK could affect public sector business, requiring monitoring of policy and budget changes.

Key numbers table

Market impact: why the stock reaction was cautious

The reported 2.66% drop in Mastek’s stock price to ₹1,700.1 suggests the market weighed multiple cross-currents. On one side, Q1 FY27 delivered sequential revenue growth, a rising order backlog, and a sharp jump in AI order book. On the other, the commentary highlighted execution and margin sensitivities, including Middle East instability, subcontractor costs, and ESOP-related impact.

The company also noted client-level timing issues, with revenue from the top five clients declining due to transition timing in healthcare projects. In addition, management flagged impacts from geopolitical situations on bench cost and delayed collections, and said Equifax continued to be affected, which impacted Q1 EBITDA.

Conclusion: backlog strength, but execution risks remain in view

Mastek’s Q1 FY27 results showed steady growth in rupee revenue, a healthy EBITDA margin, and a stronger 12-month backlog, with AI-led demand becoming a larger part of the pipeline. Management’s commentary emphasised deal momentum, particularly in the UK and North America, while acknowledging volatility in the Middle East and cost pressures that could influence near-term margins.

The next set of updates investors will watch include the pace of backlog conversion, the trajectory of AI-led wins beyond Q1, and how geopolitical and cost factors influence collections and profitability in subsequent quarters.