IT Stock in Which DIIs Added Over 6% Stake Despite Industry Slowdown

Synopsis: An institutional bet on a small-cap IT firm is drawing attention, even as the broader sector grapples with cautious client spending and macro uncertainty.

In a market where many institutional investors are staying on the sidelines with IT stocks, domestic funds have quietly raised their stake in this small-cap from 12.65% to 19.02% – an increase of 6.37 percentage points – signalling a longer-term conviction that the company’s fundamentals may be turning a corner.

The Numbers That Matter

Mastek Ltd. reported consolidated revenue from operations of Rs 938 crore in Q4FY26, up 3.6% year-on-year and 3.6% sequentially. For the full year FY26, revenue stood at Rs 3,698.8 crore, compared to Rs 3,455.2 crore in FY25, a growth of 7.0%.

Net profit for Q4FY26 came in at Rs 106.2 crore, up 30.9% year-on-year from Rs 81.1 crore in Q4FY25, though it dipped slightly from Rs 108.4 crore in Q3FY26. For the full year, net profit was Rs 404 crore versus Rs 375.9 crore in FY25. Operating EBITDA margins held steady at 16.1% in Q4FY26 and 15.8% for the full year FY26, unchanged from FY25, despite the company absorbing annual wage revisions during the quarter.

One metric that stands out is the 12-month order backlog, which grew 24.4% year-on-year to Rs 2,849.2 crore as of March 31, 2026. This is a forward-looking indicator – it tells you how much revenue the company expects to recognise over the next twelve months from contracts already signed. A growing backlog generally means more revenue visibility ahead.

Where Growth Is Coming From – and Where It Isn’t

The UK & Europe geography continues to be the engine, contributing 66.4% of Q4FY26 revenue, with the UK business growing 21.8% in rupee terms for FY26. Healthcare was a standout vertical within this, reportedly growing 95% year-on-year. The company also closed 27 AI-assisted deals in Q4 alone, taking the full-year AI deal count to 85+.

North America, however, remains a drag. The US contributed 21.5% of Q4FY26 revenue, down from 26.0% in Q4FY25. Management acknowledged that the market is “still evolving” and spoke of only a “gradual recovery,” which is measured language for continued weakness.

The Cash Position and Dividend

Total cash, cash equivalents and fair value of mutual funds stood at Rs 938.5 crore as of March 31, 2026, up from Rs 798.8 crore at the end of December 2025. The board has proposed a final dividend of Rs 16 per share for FY26, aggregating to 480% for the year, compared to 460% in FY25.

The Honest Picture

Mastek is not a hyper-growth story right now. Revenue growth of 7% for the full year is modest by IT sector standards, and the US business remains under pressure. However, the combination of a 24.4% jump in order backlog, improving PAT margins, strong cash generation, and AI-led deal wins gives institutional investors a reason to look past the near-term softness. The DII stake addition reflects a bet that the foundation being built today will translate into stronger growth in FY27.

About Mastek

Mastek is a global provider of enterprise AI, digital, and cloud services with a presence in over 40 countries and a workforce of close to 5,000 employees. The company serves sectors including public sector, healthcare, retail, manufacturing, and financial services, partnering with technology platforms such as Oracle, Salesforce, Microsoft, and AWS.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post IT Stock in Which DIIs Added Over 6% Stake Despite Industry Slowdown appeared first on Trade Brains.