Deals won in past 6 months will give higher margins

In an interview to CNBC-TV18, Ganesh Natarajan, Vice CMD, Zensar Technologies spoke about the order secured in the infrastructure and application management segment. Zensar Technologies, an infrastructure management service provider has won multi-crore deals with higher margins over past two quarters, Vice Chairman and Managing Director, Ganesh Natarajan told CNBC-TV18 today. "The deals seen in the last two quarters have been at higher margins since we're doing a lot of work in systems of engagement," Natarajan said.
On Tuesday, Pune based company announced winning Rs 100 crore worth of orders in the infrastructure and application management segment in past few weeks. The company's order pipeline is also robust, amounting USD 300 million. "The trajectory is very good. Today we have the largest pipeline deal that we have seen since 4-5 quarters," Natarajan said. Below is the edited trnacript of his interview with CNBC-TV18: Q: How these deal wins will get reflected into your revenue stream and what do you expect to see in terms of a trajectory going ahead? A: The trajectory is very good. As I mentioned earlier also, today we have the largest deal pipeline that we have seen definitely for the last 4-5 quarters, over USD 300 million in terms of pipeline and the order booking as you mentioned has been excellent because we have two core businesses in the application services and infrastructure management and in both we are seeing good pipeline and good order booking. So going forward, I do not want to put a number on it, but certainly they are seeing significant growth Quarter-on-Quarter over the next many quarters and the environment seems to be pretty good at this point. Q: Will the deal do anything to margins? Is it going to be higher or lower than your average? A: The deals in the last two quarters have all been at higher margins. We are now doing a lot of work in what we call systems of engagement which is areas like social media, cloud. A couple of the deals that we have signed recently are actually building private clouds for some of our clients. So the minute you are talking about new technology, new services, and new methods of engaging with their own customers obviously margins are much better. So definitely going forward I would think that at least 30 percent of our new deals will be in new areas which would be higher margin.