Zensar Q2 Results Review - Healthy Beat Despite Weakness In Telecom, Media, Technology Vertical: Motilal Oswal

Motilal Oswal Report

Zensar Technologies Ltd. reported a decent Q2 FY25, with revenue growth of 1.2% QoQ (estimate flat growth), driven by healthcare and life sciences (up 8.6% QoQ constant currency) and BFSI (up 3.0% QoQ CC). Deal total contract value came in at $201.8 million (up 31% QoQ/3.5% YoY), the highest order book ever for Zensar.

Ebit margin (flat QoQ/down 11.7%) came in at 13.1%, down 30bp QoQ owing to wage hikes but ahead of our estimate of 12.8%. PAT of Rs 1557 million (down 1.3% QoQ/10.4% YoY) beat our estimate of Rs 1,402 million, led by other income. For H1 FY25, revenue grew 5.2%, while Ebit and PAT declined 10.3%/4.9% versus H1 FY24. For H2 FY25, we expect revenue/Ebit to grow by 12.9%/13.9% YoY and PAT to decline by 1.1%.

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