Zensar Technologies (504067) Q1 25/26 earnings summary

Executive summary

• Revenue for Q1 FY26 grew 3.3% sequentially to $162 million (₹13,850 million), up 4.9% YoY, with broad-based growth except for manufacturing and consumer services, which declined 4.1%.

• Order book increased 11.7% YoY, with $172 million in new deals and strong AI-driven project momentum.

• Attrition improved to 9.8% LTM, with salary hikes implemented as scheduled.

• Net profit for Q1 FY26 was ₹1,820 million, and total comprehensive income reached ₹2,066 million.

• Cash and investments totaled $315.7 million, up $25.2 million QoQ.

Financial highlights

• EBITDA margin was 15.2%, down 40 bps QoQ due to higher sales, marketing, and travel expenses.

• Gross profit margin stood at 30.5%, up 20 bps sequentially.

• Profit before tax for Q1 FY26 was ₹2,406 million, up from ₹2,097 million YoY.

• Basic EPS for the quarter was ₹8.01, compared to ₹6.96 in Q1 FY25.

• Cash and investments at $315.7 million; FAD for the quarter was 13.1%.

Outlook and guidance

• Management expects macro-driven variability in client budgets but projects growth in manufacturing and consumer services in Q2.

• No double-digit growth guidance; focus remains on sequential quarterly growth and margin sustainability.

• Salary hikes of $3 million and potential ESOP scheme to impact Q2 margins.

• Continued focus on AI-driven digital transformation and ESG commitments, including net-zero emissions by FY45.

• Board approved results on July 22, 2025, with ongoing emphasis on digital and cloud infrastructure growth.