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Mastek Ltd

| Quarterly Financial Results Q3 FY 2025–26

BULLISH SENTIMENT

Report Source

⬤21st Jan 26

Summary : Mastek reported strong Q3 FY26 consolidated financial results, including revenue and profit growth, and declared an interim dividend, while addressing strategic shifts and regulatory impacts.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Total expenses Q3 FY26: 78,538 lakhs (vs 75,729 lakhs Q3 FY25).
  2. Consolidated Employee benefits expenses Q3 FY26: 49,159 lakhs.
  3. Consolidated Other expenses Q3 FY26: 26,850 lakhs.
  4. Consolidated Revenue from operations Q3 FY26: 90,568 lakhs (vs 86,953 lakhs Q3 FY25).
  5. Consolidated Revenue from operations 9M FY26: 276,075 lakhs (vs 254,981 lakhs 9M FY25).
  6. Segment Revenue Q3 FY26: UK & Europe: 59,890 lakhs, North America: 20,333 lakhs, AMEA: 10,345 lakhs.
  7. Reversal of contingent consideration relating to North America operations.
  8. Both unaudited consolidated and standalone financial results are presented and reviewed.

Corporate Overview

  1. UK & Europe
  2. North America
  3. AMEA (Middle East, South-east Asia, India, Singapore, Australia)
  4. Impairment loss on Taistech US intangibles due to de-prioritization of focus.
  5. Assessing financial impact of new Indian Labour Codes.
  6. IT services and solutions provider, including digital and cloud services.
  7. Formal and factual reporting of board decisions and financial performance.
  8. UK & Europe operations
  9. North America operations
  10. AMEA (Middle East, South-east Asia, India, Singapore, Australia)

Risk Factors

  1. Impairment loss on Taistech US intangibles.
  2. Uncertainty from new Indian Labour Codes.
  3. Reliance on other auditors for subsidiary data.
  4. Foreign exchange fluctuations impact financial results.

Key Drivers

  1. Interim dividend declared, boosting shareholder returns.
  2. Strong consolidated revenue growth year-over-year.
  3. Net profit increased, showing improved profitability.
  4. Strategic shift towards new digital experience.

Auditor’s Report

  1. Expressed a conclusion based on review, not an audit opinion, for interim financial information.
  2. No material misstatement found in consolidated and standalone statements.
  3. Reliance on review reports of other auditors for one subsidiary's financial results.
  4. Amalgamation scheme of Mastek Enterprise Solutions Private Limited with Mastek Limited, leading to restatement of comparative financial information.

Board Commentary

  1. Declared interim dividend of Rs. 8 (160%) per Equity Share for FY 2025-26.
  2. Paid final dividend of Rs. 16 (320%) per share for FY 2024-25.
  3. Impact of new Indian Labour Codes.
  4. Impairment loss on Taistech US intangibles.
  5. Assessment of financial impact from new Indian Labour Codes (Code on Wages, Industrial Relations, Social Security, Occupational Safety).
  6. Paid-up equity share capital increased by Rs. 2.5 lakhs due to ESOPs.

Corporate Governance

  1. Audit Committee reviewed and recommended the financial results.

Management Discussion & Analysis

Future Strategy

  1. De-prioritize focus on Taistech US for digital experience and other service lines from recent acquisitions.

Performance Drivers

  1. Growth in revenue from operations across key geographical segments.
  2. Improved net profit for the period.

Risk Control Measures

  1. Monitoring finalization of Central/State Rules and clarifications for Labour Code impact.

Critical Risks

  1. Impact of new Indian Labour Codes on gratuity and long-term compensated absences.
  2. Impairment loss on Taistech US intangibles.