Zensar Technologies (504067) Q4 97/98 earnings summary

Executive summary

• FY ended 30 Sep 1998 sales, rental and other services were Rs 3,829 lakh; operating loss was Rs 1,394 lakh, with results affected by the absence of software-business revenue after its prior-year transfer.

• Restructuring was reported complete, with substantial debt reduction; the proposed sale of Systems & Engineering Services (SES) to Accel remained subject to shareholder approval and due diligence.

Financial highlights

• Profit before tax was Rs 107 lakh and profit after tax Rs 125 lakh; miscellaneous and other income included Rs 2,149 lakh, including asset-sale gains and subsidiary interest and dividends.

• No dividend was proposed for FY 1997-98 because of accumulated losses; the year-end debit balance in the P&L account was Rs 877.14 lakh.

• Cash and bank balances closed at Rs 852.18 lakh versus Rs 945.53 lakh; net cash decreased Rs 93.35 lakh during the period.

• Prior-year comparisons are not like-for-like: FY 1997-98 covered 12 months versus 18 months, and FY 1996-97 included six months of software-business results.

Outlook and guidance

• SES sale to Accel was expected to complete by 31 Mar 1999; consideration was Rs 1,150 lakh cash, alongside transfer of Rs 1,015 lakh of lease liabilities, subject to due diligence and approval.

• Management cited a marked improvement in financial position following restructuring and expected sufficient funding for borrowings, liabilities and operating needs.