Zensar Technologies (504067) Q4 04/05 earnings summary

Executive summary

• Consolidated software and allied services revenue reached Rs. 34,488.92 lakh in FY05, up 29.14% YoY; consolidated PAT after exceptional items and minority interest was Rs. 3,908.09 lakh.

• Growth was supported by higher offshore revenue, expanded capacity at Kharadi, and a new four-SBU structure; reported earnings included a substantial gain on property disposal.

Financial highlights

• Consolidated total income was Rs. 34,953.83 lakh vs Rs. 27,364.60 lakh in FY04; services revenue was Rs. 34,488.92 lakh vs Rs. 26,707.15 lakh.

• Consolidated PAT before exceptional items and minority interest was Rs. 1,769.36 lakh vs Rs. 1,256.76 lakh; reported PAT after exceptional items and minority interest was Rs. 3,908.09 lakh.

• Consolidated basic EPS was Rs. 16.78 vs Rs. 5.40; diluted EPS was Rs. 16.61 vs Rs. 5.38.

• Standalone services income rose 39.10% YoY to Rs. 17,631 lakh; standalone PBT before exceptional item increased 8.13% to Rs. 1,716 lakh.

Outlook and guidance

• Strategic plan targets Rs. 1,000 crore revenue by decade-end, combining niche opportunities with differentiated traditional IT and BPO services.

• Migration revenues were expected to rise from $7 million to $15 million next year and $30 million the following year; Japan migration opportunities were estimated at $150–200 million over three years.

• Expected good growth across all SBUs in FY06; plans included adding a further 700 professionals and pursuing acquisitions and mergers.

• Priorities included commercializing SBP, building knowledge services and retail/finance domain practices, and expanding China, Continental Europe, Mexico and Australia.