Questions across 6 calls

Manish Tandon

Firm not listed in source transcripts

Zensar Technologies Limited

Zensar Technologies Limited CC-Jun25.pdf · 2025-07-22

Hi, Nitin, thanks for the question, and thanks for your message on the results. Yes, we are very pleased with the results based on what we are seeing in the industry. I would say on TMT, again, I think the worst is behind us, but will there be consistent growth ? I am not sure at this stage because as we see every day, some of the larger players are announcing layoffs and so on. So, I would say the worst is behind us, but will we see consistent growth? I am not sure at this stage. On MCS, we were coming off a very strong Q3 of last year. And hence, it has been slightly muted. Also, the impact of the Liberation Day is felt much more on Manufacturing and retail sector than in others because this is the first order impact, so to say, on these sectors. And hence, we are seeing a little bit of impact there. With that said, I think we should see growth in MCS in Q2 is what we are projecting.

Yes, see, again, it's the uncertainty in the market that will ultimately reflect in the pipeline. And also, there is a seasonality associated with the pipeline . So, that's why when we do pipeline comparison and order booking comparison, we try and do it with the same quarter of last year. And there, we have grown about 12% or so, which is a good sign. Hopefully, we will continue to see growth in order bookings and in pipeline year-over-year in subsequent quarters also. But the uncertainty is definitely having an impact.

Zensar Technologies Limited CC-Mar25.pdf · 2025-04-25

Yes.

Sandeep, first of all, thank you for the kind words on the results. See, as far as the macro is concerned, I mean, you would have heard from others also. So, there is the first order effect, which is likely to impact much more on manufacturing rather than consumer services. And fortunately, or unfortunately, our exposure to manufacturing and automotive is fairly limited. While for retail, it is slightly more. Of the 27%, I would say, majority is retail. So, we don't expect to be impacted as much. Healthcare and Life Sciences, again, I don't think there will be a significant downshift from a pricing from overall perspective, primarily because these are relatively price inelastic. I mean a person who has to get a shot has to get a shot irrespective of whether it costs $10 or $15. As far as the overall thing is concerned, I would say our order book is going to take us through first quarter or second quarter max of this year. And in fact, towards the end of the previous quarter, we started seeing some rightward shift of demand, not really cancellations, but rightward shift of demand. So from a demand perspective, I wouldn't say I'm concerned, but I would say that there is a lot of uncertainty, and it is the uncertainty that is concern.

Zensar Technologies Limited CC-Jun24.pdf · 2024-07-23

All right. So, Nitin, first of all, we are very happy with the order bookings that we had this quarter. If you compare it to the same quarter -- this is a seasonal number. And if you compare it to the same quarter last year, it is almost flat, which is a good sign becau se, I think, last Q2, we delivered some decent results. So hopefully, we'll be able to do something equivalent this time also based on order book. And again, from a pipeline perspective, the pipeline is okay. There is a lag in order booking because, last quarter, we did $180 million or so in order books. So, some of that is already there. With that said, Q2, I think we have not seen the full impact of this cybersecurity outage. In the past, when this has happened, some of the dollars allocated towards project suddenly got diverted towards more cybersecurity. That is one. And the second thing is that we are seeing some furloughs in the tech sector, which are happening in this quarter, which is the first time that it has happened in the last few years that I know of. So, there is momentum definitely, but there are also headwinds. So we are cautiously optimistic about Q2 based on our order bookings, based on our pipeline and based on what we are seeing in the market. I know you have not asked about the margin, but I'm sure that the next question is going to be on the margin. So, I just want to make clear that the 15.2% EBITDA margin has an one-timer of 1.1%. And hence, the effective normalized margin should be 16.3%EBITDA margin. This is because of Chapter 11 re organization filed by one of our clients. And in line with prudent accounting, we have taken the entire receivables of that client and put them -- provided for them, although there is a reasonably good chance of some recovery. So effectively, the normalize d margin of this quarter is also 16.3% instead of the reported 15.2%.

Vijay, you want to answer?

Zensar Technologies Limited CC-Mar24.pdf · 2024-04-25

Thanks, Nitin. Thank you for the kind words. I will take the first question, which was around sustainability and 6 months versus today. Well, as you can see, our order bookings have increased quite a lot. And this incidentally is also a quarter where furloughs, at least in the initial parts, have continued. So, from a Zensar perspective, I am feeling much more confid ent than before that as long as we maintain our execution excellence, we will continue to try and drive both the top and bottom line. Second question was on Hitech. I think you would have seen that Hitech, for the first time in last few quarters, has actually sequentially increased by *0.7%. And as you know, the carryover of furloughs that happened is primarily in Hitech. We are hoping that the worst is behind us, but some of our clients themselves are in quite a bit of bother from a financial perspective themselves. And the overall Hitech industry is not doing too well. So, we are just hoping that the worst is behind us. Y our third question was on depreciation, which I think Sachin can answer.

Yeah, Sandeep, thank you. Thanks to you for the kind words. I think the question was around how we are doing. I mean, ultimately, it's a question of probability and confidence level, right? Nobody can say with certainty as to what will happen. But I can say that I am feeling more confident. And as an organization, we are feeling much more confident than what we were, say, a couple of quarters back. And all these are indicators that we track. I mean our customer satisfaction going up, our order book booking going up. For the first time, we ar e seeing sequential growth in all the verticals that we have. So, it does increase confidence, obviously. And the probability, at least in my mind, is higher that we will come very close to what we have set out to achieve.

Zensar Technologies Limited CC-Dec23.pdf · 2024-01-22

So, I think as far as this quarter is concerned except for the Hi-Tech segment and also there was a few specific client where because of the furlough and so on deeper and wider furlough we saw declines, but if you exclude that then all parts of our business have done better than last quarter. So, I'm pretty bullish about our growth prospects, revenue growth prospects as far as non-Hi- Tech vertical is concerned. Hi tech is under stress, it is under stress for everyone. I mean there are other verticals that are under stress for everyone like Banking and Financial Services which is doing well for us, b ut Hi-Tech we are also suffering and hope fully given that the furloughs should come down in this quarter hopefully the worst is behind us.

I think first of all as I pointed out earlier, last year we have taken a lot of steps to manage and improve our client penetration and revenues. One is we have increased the addressable spend through addition of several Service Lines including Experience Services, including ESAS which includes Salesforce, Oracle, SAP and everything, and Advanced Engineering Services and we are seeing good growth in these new Service Lines that we have added. Besides that, I mean you have to stick to your core, client centricity , takes care of your employees, take care of your clients in tough times, then we'll see the benefit. Also, we are trying to ride on to the newer trends that we are seeing in the market like Generative AI and so on to see how we can piggyback on those trends and accelerate our revenue profile.

Zensar Technologies Limited CC-Sep23.pdf · 2023-10-17

The way we report the order book, the deal wins will convert and the entire $194.8 million is going to convert to revenues. The question is that you are filling the bucket from one end, but we don't know what will be the leakage of revenues du e to furloughs and due to lower number of working days and so on and so forth in the quarter. You can be assured that if we are showing 194.8, 1. it's a very precise number and 2. we will get those numbers.

I think if you look at our performance overall, except for Hitech as a vertical, we have done very well actually. We have done well in Africa. We have done well in the UK and Europe. We have done well in financial services. We have done well in consumer se rvices. Our Experience services business is growing. Horizontals, we are seeing growth, pretty much everywhere. Except for Hitech as a vertical, the growth has been very very promising across the board. But when will Hitech recover? I think that's a trilli on dollar question, not even a billion dollar question because as you know, today 70% of the capital spend in the US economy is on technology and technology related products. And as we are seeing elevated interest rates and quantitative tightening, I personally feel that unless we see a dampening of interest rates and a dampening of quantitative tightening, I don't think it will be easy for the Hitech as a vertical turnaround.