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Software services company Zensar reports 25% decline in net profit

Software services firm Zensar Technologies today reported a 25% decline in consolidated net profit at Rs 68.8 crore for the July-September quarter, impacted by currency movement.

The Pune-headquartered mid-sized firm had posted a net profit of Rs 91.3 crore in the year-ago period.

Consolidated revenue rose by 2.7% to Rs 776.7 crore during the period from Rs 756.4 crore in the same quarter of 2015-16.

For the sequential quarter, net profit declined 9.8% from Rs 76.2 crore, while revenue was up 1.9% from Rs 762.4 crore in the April-June 2016 quarter.

"The business and operating parameters in Q2 FY17 has been good... We expanded our gross margin and EBITA both in a quarter where we also had wage increase, overall showing good operating results... PAT was impacted because of the currency issue both on Q-o-Q and year-on-year basis," Zensar Technologies CEO and MD Sandeep Kishore said.

He said that the reported quarter was a good one for new order booking and the company continues to have a robust pipeline across all service lines.

"We have signed large deals with marquee clients in the Digital and IMS Cloud businesses. Innovative new solutions that we have launched in the areas of automation and robotics aligned with our clients' business needs, have begun to show traction," he added.

Digital services continued its growth momentum and contributed 27.8% to the said quarter revenue.

The company had 8,316 employees at the end of September, 2016, while the attrition rate stood at 15.6%.During the said quarter, the company added 16 new clients with the number of active clients at 187 at the end of the reported quarter.
The company saw its revenues (in constant currency terms) increase Q-o-Q by 1.5% for application management services, 4.2% for infrastructure management services and 13.9% for services. It, however, declined 13.6% for maintenance services.
Apart from revenues from manufacturing vertical, which declined by 2.2%, all other verticals grew. Retail and consumer services was up 10% Q-o-Q, financial services 1.8% and emerging verticals were higher by 14.6%.
In terms of geography, revenues from the the US grew 2%, Europe by 3%and Africa by 4.1% on Q-o-Q basis.

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