Zensar Technologies (504067) Q2 24/25 earnings summary

Executive summary

• Achieved highest ever order book at $201.8 million, reflecting strong client confidence and robust deal wins.

• Q2 FY25 revenue reached $156.2 million, up 4% YoY and 1.2% sequentially in reported currency.

• EBITDA margin improved to 15.4%, with PAT at 11.9% of revenue.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024.

• Annual salary increments delivered while maintaining margin expansion.

Financial highlights

• Revenue grew 4% YoY and 1.2% sequentially to $156.2 million; constant currency growth was 3.3% YoY.

• EBITDA margin at 15.4% (up 20 bps QoQ); PAT margin at 11.9%; gross margin at 28.1%.

• Cash and cash equivalents at $255 million after dividend and acquisition outflows.

• Consolidated revenue for Q2 FY25 was ₹13,080 million, with net profit at ₹1,557 million.

• DSO improved by one day to 71 days, reflecting healthy collections.

Outlook and guidance

• Expect lower impact of furloughs in Q3 compared to Q2, with potential for better sequential performance.

• Aim to maintain mid-teen EBITDA margins, reinvesting any excess into sales and capability building.

• Management remains focused on disciplined execution and investment in growth areas amid a dynamic and competitive market.

• Results include the impact of the BridgeView Life Sciences, LLC acquisition, making them not directly comparable to previous periods.

• Cautious on discretionary spending due to geopolitical volatility, but optimistic about increased investments as interest rates ease.