Zensar Technologies (504067) Q4 02/03 earnings summary

Executive summary

• Consolidated software-services revenue rose 21.76% YoY to Rs 22,734.72 lakh; reported PAT increased 22.20% to Rs 985.57 lakh. Quarter-on-quarter revenue and bottom-line growth were described as the first in the business’s history.

• Strategy centered on vertical-focused practices, more offshore delivery, stronger customer relationships, and profitable growth amid a difficult IT market.

Financial highlights

• Consolidated total income was Rs 23,245.88 lakh versus Rs 20,150.07 lakh; software development and allied services contributed Rs 22,734.72 lakh.

• Consolidated PBT was Rs 1,597.61 lakh and reported PAT Rs 985.57 lakh, versus Rs 1,144.33 lakh and Rs 806.51 lakh in FY 2001-02.

• Consolidated EPS rose to Rs 4.23 from Rs 3.46; diluted EPS was Rs 4.21 versus Rs 3.45.

• Offshore revenue share increased to 31.81% from 24.44%; total revenue rose 15.36% to Rs 23,246 lakh, including Rs 403 lakh miscellaneous income.

Outlook and guidance

• Priorities included increasing offshore work, deepening selected verticals, leveraging Solution BluePrint and Knowledge Management, and growing through alliances and acquisitions.

• Planned entry into BPO included investment in facilities and an equity stake; commitment to the Suntech Data Systems venture was to be linked to performance milestones.

• Management expected Indian IT exports to keep growing; the industry overview cited ~30% export growth in FY 2002-03 and ITES/BPO growth above 60%.