Zensar Technologies Q2 results: Net profit up 206.3% to Rs 173.9 crore

Zensar Technologies posted a net profit of Rs 173.9 crore for the second quarter ended September, up 206.3 per cent from a year ago as focus on cost optimisation measures is bearing fruit. On a sequential basis, profit was up 11.3 per cent.

The revenue for the September quarter grew 0.5 per cent from the year-ago period and 1.1 per cent quarter-on-quarter to Rs 1,240.8 crore on broad-based growth across geographies, service lines, and sectors except for high tech and manufacturing, which declined 8 per cent Q-o-Q in constant currency. 

"While we saw some slowdown in certain areas of the business, we also experienced good momentum in a few of our geographies and verticals. This demonstrates the resilience of our business model and the strength of our customer relationships," said Manish Tandon, chief executive officer and managing director, Zensar.

While Zensar does not provide guidance, Tandon said that the market will remain tough for the next few quarters, especially in Q3, which is a seasonally weak quarter for IT companies on account of furloughs or a lower number of working days due to holidays.

The dollar revenue in constant currency declined 3.4 per cent year-on-year but grew 0.2 per cent sequentially in constant currency to $150.2 million as the macroeconomic environment continues to be challenging.

In terms of verticals, Manufacturing & Consumer and Banking & Financial Services led the growth for the second quarter, growing at 6.7 per cent and 3.1 per cent respectively.

The voluntary attrition rate, on a last twelve-month basis, for the September quarter reduced to 13.1 per cent from 15.9 per cent in the June quarter, indicating that it is gradually coming down, a trend seen across the industry.

At a time when many top IT services companies have deferred salary hikes, Zensar has rolled out annual wage hikes across the company effective July 1. The company reported net cash of $227.1 million at the end of the quarter, with Y-o-Y growth of 40.1 per cent.
 

"As we step into the second half of this financial year, we have a healthy order book. We continue to stay focused on execution, innovation, and cost optimisation to further maintain Zensar's financial performance achieved in the last few quarters," said Sachin Zute, chief financial officer, Zensar.

Zensar announced its earnings after market hours on Tuesday. Ahead of its earnings, its shares were up 0.67 per cent to close at Rs 549.70 on the BSE.