Zensar Technologies (504067) Q2 24/25 earnings summary

Executive summary

• Achieved highest ever order book at $201.8 million, reflecting strong client confidence and robust deal wins.

• Revenue for Q2 FY25 was $156.2 million, up 4% year-over-year and 1.2% sequentially in reported currency.

• Maintained stable margins for the third consecutive quarter despite economic headwinds and sector-specific slowdowns.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, along with the cash flow statement.

• Independent auditors reviewed both standalone and consolidated results, reporting no material misstatements.

Financial highlights

• Revenue grew 4% year-over-year and 1.2% sequentially to $156 million; constant currency growth was 3.3% year-over-year.

• EBITDA margin improved by 20 bps QOQ to 15.4%, within the mid-teen guided range.

• Gross margin at 28.1%, down 30 bps QOQ, mainly due to wage hikes and furloughs.

• Consolidated revenue from operations for Q2 FY25 was ₹13,080 million, up from ₹12,408 million in Q2 FY24.

• Cash and cash equivalents at $255 million after dividend and acquisition-related outflows.

Outlook and guidance

• Expect lower impact of furloughs in Q3 compared to Q2, with potential for better sequential performance.

• Aim to maintain mid-teen EBITDA margins, reinvesting any excess into sales and capability building.

• Continued focus on application modernization, cloud transformation, and security solutions.

• Ongoing ESG initiatives targeting net-zero emissions by FY40 and increased gender diversity.

• Results for the quarter and half year include the impact of the BridgeView Life Sciences, LLC acquisition, making them not directly comparable to previous periods.