Zensar Technologies (504067) Q4 00/01 earnings summary

Executive summary

• FY 2000-01 consolidated revenue grew 21.12% and profit increased 35.96%; strategic repositioning shifted from technology-led services to business solutions in selected verticals.

• All revenue moved to direct customer contracts during the year, supporting stronger earnings and margins; customer base and geographic reach expanded.

• The operating model focused on Banking, Finance and Insurance; Manufacturing, Retail and Distribution; and Telecom, Wireless and Utilities.

Financial highlights

• Consolidated service revenue was Rs 2,263.70 mn; total income Rs 2,424.39 mn; profit before tax Rs 334.09 mn; tax Rs 92.50 mn; and profit after tax Rs 241.59 mn.

• Consolidated revenue rose from Rs 1,869.3 mn in 1999-2000 to Rs 2,263.7 mn in 2000-01; PAT rose from Rs 177.7 mn to Rs 241.6 mn.

• Other income increased to Rs 160.7 mn from Rs 66.6 mn, including a ~Rs 70 mn UK tax refund.

• Standalone income was Rs 769.84 mn and PAT Rs 114.54 mn; post-amalgamation accumulated losses left a debit balance of Rs 3.86 mn.

Outlook and guidance

• Revenue and profit growth at attractive rates targeted, with a revenue goal of US$150 mn by 2004.

• Business plan assumed an IT-demand revival from Q4 of FY 2001-02; cost and client controls were adopted to protect profits in the interim.

• Select-vertical strategy, more ODC customers and knowledge management were expected to improve margins, productivity and delivery efficiency.

• A comprehensive knowledge repository was expected to reduce project execution time and generate incremental savings of ~30%.