Zensar net profit down 4.7% annually

Growth across sectors and signs new deal worth $25mn during Q2

Cross currency fluctuation impacted IT services and solutions firm Zensar Technologies net profit numbers on a year-on-year basis, however growth across regions and a strong pick up in retail and geographies propelled the topline growth numbers for second quarter FY15.

Zensar Technologies, an RPG group company, today reported net profit of Rs  67.3 crore for the second quarter ending September 30, 2014, down 4.7 per cent from Rs  70.63 crore. On sequential basis net profit was up 20.3 per cent.

Revenue for the quarter at Rs  647.68 crore was up 9.8 per cent from Rs  589.77 crore. On sequential basis revenue grew by 7.1 per cent.

“Net profit were down on a year-on-year basis due to the currency swing. But on sequential basis we have done well at 20.3 per cent. Our gross margins too have gone up for the quarter. Though the revenue gowth in the infrastructure management (IM) space have been flat we see huge demand for our enterprises services and from retail space,” said Ganesh Natarajan, Vice Chairman and CEO of Zensar Technologies. Zensar’s retail business signed new deals worth $25 million during the quarter. The company reported addition of 16 clients and 171 employees this quarter. The acquisition of PA brings an additional 856 employees into the Zensar fold.  With revenues of over $38 million, PA is one of the largest Oracle ATG and Endeca partners in the world. It is an Oracle Platinum partner with presence in US, UK, Latin America, Middle East and Africa.

This acquisition furthers Zensar's mission to strengthen its dominant position in the critical and fast growing e-Commerce space.

Nitin Parab, Head Enterprise Transformation Services, Zensar Technologies said, "The US market has been growing steadily, and there is also good news in growth markets of India and Europe with significant new client acquisition in the government and public sector".

The Enterprise business (ETS) continues grew cross major territories of US, Europe and Africa with a growth trajectory of 26% year-on-year and four% sequential growth in US dollar terms. The shift within infrastructure management (IM) to dual-shore services continues, with dual-shore services contributing to 35.6% of revenues in Q2, up from 33.3% in the last quarter and the share of products business reducing to 21.5% in Q2 from 27.9% in the last quarter.

"Within the IM space we are de-emphasising the product business and it's a deliberate attempt as margins are low in that segment. Overall we see a strong momentum in growth from across sectors and geographies," added Natarajan.