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Zensar in Q1FY27 reported revenues of US$159.5 mn

ICICIdirect Research 30 Jul 2026 DISCLAIMER

News: Zensar in Q1FY27 reported revenues of US$159.5 mn, up 1.1% QoQ/down 2% YoY in CC terms. Vertical wise on a QoQ basis in CC terms, growth was led by BFSI (48.8% of the mix), which grew 8.3%, while Healthcare & Life Sciences (10% of the mix), Manufacturing & Consumer Services (24.9% of the mix) and TMT (16.2% of the mix) declined by 3.8%, 2.3% and 9.1%, respectively. Geography wise on a QoQ basis in CC terms, US (66.2% of the mix) grew 2.5%, while Europe (21.5% of the mix) and South Africa (12.3% of the mix) declined by 1.4% each. Reported EBITDA margin stood at 14.6%, down ~160 bps QoQ, impacted by large-deal transition and early-stage execution (-200 bps) and reversal of management bonus (-150 bps), partly offset by lower other direct costs (+130 bps) and forex (+70 bps). Reported PAT stood at ₹183.8 crore, down 12.7% QoQ/up 1% YoY. Order book stood at US$149.2 mn, down 62.9% QoQ following the exceptionally strong Q4 and was down 13.3% YoY as well. Total headcount at 11,342 employees, saw an addition of 563 employees QoQ. Attrition declined ~20 bps QoQ to 9.6%. The company ended the quarter with net cash and cash equivalents of US$317.5 mn.

View: Zensar returned to sequential growth in Q1FY27 with revenue up 1.1% QoQ CC, driven by a strong 8.3% growth in BFSI, which more than offset continued weakness across TMT, HLS and Manufacturing. However, TMT remains a key drag, declining 9.1% QoQ/28% YoY CC, while the broader demand environment continues to be characterised by prolonged decision cycles, slower project mobilisation and restrained discretionary spending. More importantly, profitability came under pressure, largely due to transition and early-stage execution costs associated with the large deal won in Q4. While the sharp sequential decline in order book to US$149.2 mn needs to be viewed against Q4's unusually high US$401.8 mn bookings, deal conversion and ramp-up remain key monitorables. Encouragingly, the large deal won last quarter should provide incremental revenue visibility as it scales, while BFSI continues to demonstrate healthy momentum and AI-led offerings are gaining traction across clients. Overall, the return to sequential growth is encouraging, but sustained improvement remains contingent on successful large-deal ramp-up, recovery in stressed verticals and normalization of margins following elevated transition costs. We await management commentary for further insights.

Impact: Negative

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