Zensar reports 14.4% quarterly YoY constant currency growth in Q2FY23

Pune, India, October 20, 2022: Zensar Technologies, a leading experience engineering and technology solutions company, announced its consolidated financial results for the second quarter, ending September 30, 2022, of the fiscal year 2022-2023.

Financial Highlights:

• In Q2FY23, the company reported revenue of $155M, sequential QoQ growth of 1.6%, and quarterly YoY growth of 14.4% in constant currency

• In Q2FY23, the EBITDA was at 8.5% of revenues and the PAT stood at 4.6% of revenues

• The company reported net cash of $162.1M at the end of Q2FY23

• The US region posted sequential QoQ growth of 0.4% and quarterly YoY growth of 11.1%

• The Europe region posted sequential QoQ growth of 1.7% and quarterly YoY growth of 25.9% in constant currency

• South Africa posted sequential QoQ growth of 9.1% and quarterly YoY growth of 16.4% in constant currency

• Banking, Financial Services, and Insurance (BFSI) registered sequential QoQ growth of 6.1% and quarterly YoY growth of 33.8% in constant currency

• Hi-Tech and Manufacturing (HTM) and Emerging registered sequential QoQ growth of 0.1% and quarterly YoY growth of 6.5% in constant currency

• Consumer Services registered sequential QoQ decline of 2.5% and quarterly YoY growth of 5% in constant currency

Ajay S. Bhutoria, CEO and Managing Director, Zensar Technologies, said, “In Q2FY23, we reported quarterly revenues of $155M, sequential QoQ growth of 1.6%, and quarterly YoY growth of 14.4% in constant currency. The investments made in the past few quarters have led us to win deals of $141.8M, despite challenging market conditions in some of our verticals. Our key business services, including Advanced Engineering Services (AES), Data Engineering Services, and Platform Services, have consistently expanded with new deal wins, addition of new logos, and revenue growth. Our BFSI vertical continues its growth trajectory, reporting sequential QoQ growth of 6.1% and quarterly YoY growth of 33.8% in constant currency. South Africa has performed distinctly in the past quarter, posting sequential QoQ growth of 9.1% and quarterly YoY growth of 16.4% in constant currency. Due to a sluggish macro-economic environment, we did experience softness in our Hi-Tech and Manufacturing and Consumer Services businesses.”

He further stated, “Our focus on training and skilling initiatives has enabled our teams and freshers to hone their capabilities aimed at accelerating value for our clients.”

Commenting on Q2FY23 performance, Sachin Zute, CFO, Zensar Technologies, said, “Q2FY23 was a stable quarter for the company. Margins in Q2FY23 were mainly affected due to significant wage increases across all levels to enable us to navigate effectively through the external supply side environment. Our talent pool has responded well to these increases, and we have seen moderation in attrition rates.”

He further stated, “Our revenues grew by 1.6% on a sequential QoQ basis and 14.4% on a quarterly YoY basis on constant currency terms. We had an adverse impact due to currency volatility in GBP and ZAR. The company is working on multiple initiatives toward margin improvement. Our DSO has improved to 80 days from 83 days in Q1FY23, showing improving operational efficiency. As we step into the second half of this fiscal year, we have a healthy order book of $141.8M. We will continue to maintain operational rigor focused on delivery excellence and cost optimization.”

Significant Wins in Q2FY23:

• Application development services and mandate for data engineering and data services for an American global technology company

• Application services for a large US medical technology manufacturer

• Application services for a leading US-based provider of risk management products and services

• Mandate for advanced engineering services for a South Africa-based financial services company

• Application services for a leading retailer from South Africa

Corporate Excellence Snapshot in Q2FY23:

• Mentioned as Major Contender in Everest Group Digital Workplace Services PEAK Matrix® Assessment 2022, Europe and US

• Mentioned as Major Contender in Everest Group Adobe Services PEAK Matrix® Assessment 2022

• Mentioned as Star Performer and Major Contender in Everest Group Data and Analytics (D and A) Services PEAK Matrix® Assessment 2022

• Mentioned as Major Contender in Everest Group IT Security Services PEAK Matrix® Assessment 2022, North America

Awards and Recognitions in Q2FY23:

• Gold recognition for Learning and Development, Brandon Hall Excellence Awards