Zensar Technologies (504067) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue reached $162 million, up 4.9% YoY and 3.3% QoQ, with broad-based growth except for manufacturing and consumer services, which declined 4.1%.

• Order bookings rose 11.7% YoY to $172 million, supported by a healthy pipeline of AI-driven engagements.

• Attrition improved to 9.8%, the lowest in two years, with salary hikes implemented as scheduled.

• Net profit for Q1 FY26 was ₹1,820 million, up from ₹1,579 million YoY.

• Total comprehensive income for the quarter reached ₹2,066 million, up from ₹1,545 million YoY.

Financial highlights

• EBITDA margin was 15.2%, down 40 bps QoQ; gross margin improved to 30.5%, up 20 bps QoQ; PAT margin at 13.1%.

• Cash and investments totaled $315.7 million; FAD for the quarter was 13.1%.

• Top five clients contributed 27.2% of revenue; active clients stable at 166.

• Total income for the quarter was ₹14,049 million, with profit before tax at ₹2,406 million.

• Basic EPS for the quarter was ₹8.01, compared to ₹6.96 in Q1 FY25.

Outlook and guidance

• Management expects macro-driven variability in client budgets but projects growth in manufacturing and consumer services in Q2.

• No double-digit growth guidance; focus remains on sequential quarterly growth and margin sustainability.

• Salary hikes of $3 million and potential ESOP scheme to impact Q2 margins.

• Board and management remain focused on digital and cloud infrastructure growth.

• Cautiously optimistic outlook for FY26, with emphasis on AI-led deals and reskilling.