Zensar Technologies

25 Jan 2022 , 03:01 PM

Quarterly result QoQ comparison

Net sales (including other operating income) of Zensar Technologies has increased 4.94% to Rs 1102.5 crore.  

Operating profit margin has declined from 15.34% to 14.38%, leading to 1.67% decline in operating profit to Rs 158.50 crore.  Purchase of finished goods cost rose from 2.08% to 2.57%.   Employee cost increased from 60.90% to 61.12%.   Other expenses rose from 21.68% to 21.94%.   Expenses from contract rose from 14.91% to 15.25%.   

Other income rose 5.24% to Rs 24.1 crore.  PBIDT fell 0.97% to Rs 173.7 crore.  Provision for interest rose 2.30% to Rs 8.9 crore.  

PBDT fell 0.97% to Rs 173.7 crore.  Provision for depreciation rose 1.28% to Rs 47.4 crore.  

Profit before tax down 1.79% to Rs 126.30 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 33.9 crore, compared to Rs 32.8 crore.  Effective tax rate was 26.84% compared to 25.51%.

Net profit attributable to owners of the company decreased 3.60% to Rs 91.00 crore.  

Promoters stake was 49.10% as of 31 December 2021 ,compared to 49.12% as of 30 September 2021 .  

Quarterly result YOY comparison

Net sales (including other operating income) of Zensar Technologies has increased 17.99% to Rs 1102.5 crore.  Sales of segment has gone up 17.90% to Rs 907.60 crore (accounting for 82.32% of total sales).  Sales of segment has gone up 18.41% to Rs 194.90 crore (accounting for 17.68% of total sales).  

Profit before interest, tax and other unallocable items (PBIT) has slumped 16.89% to Rs 161.40 crore.  PBIT of segment fell 24.21% to Rs 129.60 crore (accounting for 80.30% of total PBIT).  PBIT of segment rose 37.07% to Rs 31.80 crore (accounting for 19.70% of total PBIT).  

PBIT margin of segment fell from 22.21% to 14.28%.  PBIT margin of segment rose from 14.09% to 16.32%.  Overall PBIT margin fell from 20.78% to 14.64%.  

Operating profit margin has declined from 19.84% to 14.38%, leading to 14.51% decline in operating profit to Rs 158.50 crore.  Purchase of finished goods cost fell from 3.91% to 2.57%.   Employee cost increased from 56.99% to 61.12%.   Other expenses rose from 19.13% to 21.94%.   Expenses from contract rose from 12.47% to 15.25%.   

Other income rose 402.08% to Rs 24.1 crore.  PBIDT fell 4% to Rs 182.6 crore.  Provision for interest fell 31.54% to Rs 8.9 crore.  

PBDT fell 1.98% to Rs 173.7 crore.  Provision for depreciation rose 11.27% to Rs 47.4 crore.  

Profit before tax down 6.17% to Rs 126.30 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 33.9 crore, compared to Rs 35.6 crore.  Effective tax rate was 26.84% compared to 20.37%.

Minority interest increased 7.69% to Rs 1.40 crore.  Net profit attributable to owners of the company decreased 34.01% to Rs 91.00 crore.  

Promoters stake was 49.10% as of 31 December 2021 ,compared to 49.22% as of 31 December 2020 .  

For year-to-date (YTD) results analysis.

Net sales (including other operating income) of Zensar Technologies has increased 6.36% to Rs 3089.9 crore.  Sales of segment has gone up 9.54% to Rs 2,598.40 crore (accounting for 84.09% of total sales).  Sales of segment has gone down 7.77% to Rs 491.50 crore (accounting for 15.91% of total sales).  

Profit before interest, tax and other unallocable items (PBIT) has slumped 3.51% to Rs 503.80 crore.  PBIT of segment fell 3.08% to Rs 430.90 crore (accounting for 85.53% of total PBIT).  PBIT of segment fell 5.94% to Rs 72.90 crore (accounting for 14.47% of total PBIT).  

PBIT margin of segment fell from 18.74% to 16.58%.  PBIT margin of segment rose from 14.54% to 14.83%.  Overall PBIT margin fell from 17.97% to 16.30%.  

Operating profit margin has declined from 17.65% to 15.93%, leading to 4% decline in operating profit to Rs 492.20 crore.  Purchase of finished goods cost fell from 3.23% to 2.75%.   Employee cost increased from 57.74% to 60.30%.   Other expenses fell from 21.22% to 21.02%.   Expenses from contract rose from 14.22% to 14.25%.   

Other income rose 247.87% to Rs 65.4 crore.  PBIDT rose 4.91% to Rs 557.6 crore.  Provision for interest fell 35.99% to Rs 26.5 crore.  

PBDT rose 8.37% to Rs 531.1 crore.  Provision for depreciation rose 4.99% to Rs 136.7 crore.  

Profit before tax grew 9.59% to Rs 394.40 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 103.6 crore, compared to Rs 95.1 crore.  Effective tax rate was 26.27% compared to 30.54%.

Minority interest decreased 4.35% to Rs 4.40 crore.  Net profit attributable to owners of the company increased 35.29% to Rs 286.40 crore.  

Promoters stake was 49.10% as of 31 December 2021 ,compared to 49.22% as of 31 December 2020 .  

Dividend: The board has declared Interim Dividend of Rs 1.5 per equity share of Rs 2 each.

Management Commentary

Commenting on the Q3Y22 results, Ajay S Bhutoria, CEO and Managing Director, Our revenue growth of 1.8% quarterly YoY reinforces the value our clients place on our services. Our efforts in the Banking vertical are bering fruit with a 76.55% quarterly YoY growth. Similarly, our Consumer Services business grew by 26% YoY during the same quarter. These outcomes are the result of initiatives launched in the first half of the year and include the integration of M3bi into our overall strategy.

Adding further, he said, To meet increasing demand, we have stepped up investments in strengthening our talent pool by expanding lateral hiring and hiring from campuses, as well as by up skilling our existing workforce. As always, the safety and well- being of our associates continue to be a top priority as we continue to work largely from home in all locations.

Navneet Khandelwal, Chief Financial Officer, Increased operational efficiency has resulted in improved working capital by reducing our DSO in Q3FY22 to 78 days, down from 85 days in Q2. Our new offerings across all regions continue to bear positive results. Our US region reported robust growth of 20.8% quarterly YoY and 4.4% sequentially QoQ, while Europe posted quarterly YoY growth of 23.7% and sequential QoQ 6.1%. Meanwhile, Africa posted 8.3% quarterly YoY growth. We continue to streamline operational metrics and fresher intake on margins. Additionally, the Board of Directors of Zensar technologies Ltd at its meeting held on January 24, 2022, has recommended payment of Interim Dividend at the rate of Rs 1.5 per Equity Share for the financial year 2021-2022.

Zensar: Consolidated Financial Results

	2112 (3)	2109 (3)	Var. (%)	2012 (3)	Var. (%)	2112 (9)	2012 (9)	Var. (%)	2103 (12)	2003 (12)	Var. (%)
Sales	1102.50	1050.60	4.9	934.40	18	3089.90	2905.10	6	3781.39	4181.68	-10
OPM (%)	14.4	15.34		19.8		15.9	17.6		18.11	12.13
OP	158.50	161.20	-2	185.40	-15	492.20	512.70	-4	684.83	507.06	35
Other inc.	24.10	22.90	5	4.80	LP	65.40	18.80	248	25.45	88.42	-71
PBIDT	182.60	184.10	-1	190.20	-4	557.60	531.50	5	710.28	595.48	19
Interest	8.90	8.70	2	13.00	-32	26.50	41.40	-36	53.53	60.51	-12
PBDT	173.70	175.40	-1	177.20	-2	531.10	490.10	8	656.75	534.97	23
Dep.	47.40	46.80	1	42.60	11	136.70	130.20	5	174.71	159.18	10
PBT	126.30	128.60	-1.8	134.60	-6	394.40	359.90	10	482.04	375.79	28
EO Exp	–	–		-40.20		–	48.50		49.10	–
PBT after EO	126.30	128.60	-1.8	174.80	-28	394.40	311.40	27	432.94	375.79	15
Tax	33.90	32.80	3	35.60	-5	103.60	95.10	9	125.96	104.19	21
PAT	92.40	95.80	-4	139.20	-34	290.80	216.30	34	306.98	271.60	13
MI	1.40	1.40	0	1.30	8	4.40	4.60	-4	6.95	8.18	-15
Net Profit	91.00	94.40	-3.6	137.90	-34.0	286.40	211.70	35	300.03	263.42	14
EPS (Rs)*	16.1	16.7		4.8		16.9	14.5		14.8	11.7
* On Current Paid up equity capital of Rs 45.2 crore, Face value Rs 2. Figures in crore Source: Capitaline Databases EO: Extraordinary items EPS is adjusted after EO and relevant tax

Zensar Technologies: Consolidated Financial Results

	2112(3)	2109 (3)	Var. (%)	2012(3)	Var. (%)	2112 (9)	2012(9)	Var. (%)	2103 (12)	2003 (12)	Var. (%)
Sales
Digital and application service	907.60	890.70	2	769.80	18	2598.40	2372.20	10	3116.69	3515.18	-11
Digital foundation service	194.90	159.90	22	164.60	18	491.50	532.90	-8	664.70	666.50	0
Total	1102.50	1050.60	5	934.40	18	3089.90	2905.10	6	3781.39	4181.68	-10
Segment Results
Digital and application service	129.60	148.70	-13	171.00	-24	430.90	444.60	-3	604.9	469.8	29
Digital foundation service	31.80	23.90	33	23.20	37	72.90	77.50	-6	98.0	80.4	22
Total	161.40	172.60	-6	194.20	-17	503.80	522.10	-4	703.0	550.2	28
Less
Finance Cost	8.90	8.70	2	13.00	-32	26.5	41.4	-36	53.53	60.51	-12
Other Un-allocable expenditure, net off un-allocable income	26.20	35.30	-26	46.60	-44	82.9	120.8	-31	167.38	113.89	47
PBIT Margin
Digital and application service	14.3%	16.7%		22.2%		16.6%	18.7%		19.4%	13.4%
Digital foundation service	16.3%	14.9%		14.1%		14.8%	14.5%		14.7%	12.1%
PBT	126.30	128.60	-2	134.60	-6	394.40	359.90		482.0	375.8	28

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