Mastek Targeted at Rs 2240 by Anand Rathi

Mastek Reports In-Line Q4FY26 Performance Amidst Macro Headwinds

Mastek, a leading global digital transformation company, has reported an in-line performance in the fourth quarter of fiscal year 2026, despite facing macro and geopolitical headwinds. The company's consolidated current revenue (CC revenue) grew by 0.3% quarter-over-quarter (q/q) to $103.5 million, while the 12-month order backlog witnessed a robust 13.6% year-over-year (y/y) growth.

The company's margin declined approximately 70 basis points (bps) q/q due to the full quarter impact of the wage hike, which was partly mitigated by forex tailwinds and improved operational efficiency. The UK remained the key stabilizer for the company, driven by strength in the Healthcare and Life Sciences (HLS) and Banking, Financial Services, and Insurance (BFSI) verticals. In contrast, North America is in rebuild mode, although the improving order book and deal pipeline signal a gradual recovery, with a more sustainable turnaround expected from fiscal year 2027.

Meanwhile, the Middle East and Africa (MEA) region was supported by the realization of pending war revenue, but it remains under pressure in the near-term due to delays in decision-making by clients in the region, which is affected by conflicts in West Asia. Strategically, the company is pivoting towards AI-led, outcome-based engagements, accepting near-term volatility for long-term growth and wallet share gain.

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Outlook and Recommendation

Given the company's performance and strategic direction, Anand Rati's research team retains a BUY recommendation on Mastek with a target price (TP) of Rs2,240, which implies a potential upside of approximately 28% from the current market price (CMP).