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Nirmal Bang Report
Zensar Technologies Ltd. posted a mixed set of numbers with sub-par revenue and order book, while being cautious in commentary. Revenue at $160.5 million was 2.1% and 0.9% lower than the brokerage's and consensus estimates. It was down 1.3% and up 1.3% on QoQ and YoY CC basis, respectively. The brokerage expected 0.5% QoQ CC growth.
Ebit margin at 16% was 260 basis points and 230 bps above brokerage and consensus estimates. The beat was on account of lower-than-expected employee cost. There was a one-time expense of Rs 254 million on account of the New Labour Code policy and this has not been included in the Ebit margin.
The Ebitda margin expanded by 200bps QoQ to 17.5%. Tailwinds included currency benefits (+70bps), improved offshore mix (+140bps), leave utilization benefit (+100bps), and operational efficiencies (+70bps). This was partially offset by furloughs (-100bps) and ESOP cost (-90bps).
Zensar will continue to invest in building capabilities specifically around AI and sales. It has reiterated the midteens margin guidance.
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