Mastek Ltd. is navigating the evolving UK healthcare landscape as the UK government moves to abolish NHS England and merge it into the Department of Health and Social Care (DHSC). This change impacts one of Mastek’s largest clients, NHS England, which accounts for 22% of its revenue from a £200 billion budget. However, Mastek’s management remains optimistic, stating that while there may be short-term delays, the company does not foresee a significant reduction in spending.

Mastek’s Strategic Positioning in UK Healthcare and Government Contracts

To strengthen its presence in the UK, Mastek has been shortlisted as a vendor for the Digital Capability for Health 2 framework, a three-year initiative that includes 22 suppliers focusing on digital services, data management, and healthcare service development. The company also remains a key supplier in the £1.2 billion defence framework, alongside other contracts from the Home Office and Ministry of Justice, ensuring continued revenue stability from UK government verticals. These segments contribute nearly 60% of Mastek’s revenue, reinforcing its stronghold in the region.

Despite the NHS restructuring, Mastek aims for mid-teens revenue growth in the UK. However, this aggressive expansion could result in slightly lower margins as the company prioritizes market share over profitability.

Mastek’s Expansion Plans in the US and AMEA Region

Beyond the UK, Mastek is revamping its US business by focusing on AI, data engineering, and managed services engagements. The company is also realigning its sales incentive structure to accelerate revenue generation. The AMEA region is undergoing restructuring to improve profitability and focus on scalable accounts, ensuring better margin control and efficient resource allocation.

HDFC Securities’ Outlook and Stock Performance

Leading brokerage HDFC Securities has maintained its ‘Add’ rating on Mastek, with a price target of ₹3,100. The firm expects the company to deliver a 12% revenue CAGR and 17% EPS CAGR between FY24-27E, highlighting Mastek’s strong fundamentals despite short-term uncertainties.

However, the stock has seen a significant correction, falling 7% in the last month and 23% over three months. As of March 24, Mastek Ltd. was trading with losses of up to 3%, contributing to its 25% decline in 2025. Investors are watching how the UK healthcare restructuring and US expansion efforts will shape Mastek’s future growth trajectory.

Investor Takeaway: Should You Buy Mastek Stock?

Despite recent corrections, Mastek’s long-term growth potential remains intact due to its strong government contracts, expansion in the US, and continued focus on digital transformation. HDFC Securities' ‘Add’ rating reflects confidence in Mastek’s ability to sustain double-digit revenue growth over the coming years.

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