Zensar Technologies Ltd (NSE: ZENSARTECH) is a mid-tier IT services firm focused on digital transformation, AI-led solutions, and sectors like BFSI, hi-tech, and manufacturing. It shows steady revenue growth and improving profitability amid a challenging IT macro environment, making it a balanced pick for conservative investors.
Core Data Points
Market Position: Mid-cap IT services player (mcap ₹17,500 Cr); HQ Pune, founded 1991; part of RPG Group; 11,500+ employees across 30+ global offices.
Share Price & Valuation: CMP ~₹850-₹870 (Feb 2026); P/E 23.6x TTM, EV/EBITDA 12.5x; dividend yield 1.2% (₹10/share FY25). Trades at 3.8x sales vs. IT peer median 4.2x.
Ownership: Promoters 24%; FIIs 23%; DIIs 25%; public 28%. Stable promoter stake with low pledging (0%).
Latest Financials (Point-Wise)
Revenue: FY25 ₹5,281 Cr (+7.7% YoY); 9M FY26 ₹4,200 Cr (+8% YoY); Q3 FY26 ₹1,431 Cr (+7.9% YoY, +2% QoQ). Constant currency growth 9.2%.
EBITDA & Margins: FY25 EBITDA ₹815 Cr (margin 15.4%); Q3 FY26 ₹251 Cr (17.5% margin, +190 bps YoY) due to utilisation rise to 82% and pyramid optimisation.
PAT: FY25 ₹740 Cr (+10% YoY); Q3 FY26 ₹200 Cr (+25% YoY); EPS ₹24.6 TTM. ROE 20.1% (5Y avg 15%), ROCE 25.8%.
Balance Sheet: Debt/Equity 0.01x; cash + investments ₹2,240 Cr; working capital days 70 (stable); capex FY25 ₹150 Cr focused on data centres/AI.
Order Book: TCV FY26 $774 Mn (+30% YoY, 55% AI-led); new logos 10 in Q3; pipeline $3 Bn.
Services Portfolio
Core Offerings: Digital transformation via Zensar DIGVOLVE (AI/ML, cloud, IoT, cybersecurity); application dev/management, data engineering, BPM.
Verticals Breakdown: BFSI 35%, Hi-tech/Manufacturing 30%, Healthcare/Media 20%, Energy/Utilities 15%. Shift to product engineering (25% revenue).
Key Differentiators: 70% repeat business; AI Factory (GenAI pilots for 20 clients); partnerships with AWS, Microsoft, ServiceNow; IP assets like Nex-Z platform.
Elaborated Growth Drivers
AI & Digital Deals: 30% TCV AI-led ($232 Mn in FY26); Q3 wins include $210 Mn BFSI managed services (5.5Y), $50 Mn hi-tech deal. Targets 15% CC growth FY26 via 1,000+ AI opportunities.
Geographic/Geography Expansion: US 60% revenue (up 10% YoY), Europe 25%, India/APAC 15%; new centres in Poland, Mexico for nearshore delivery.
Margin Levers: Utilization 82% (up 200 bps), attrition 12% (industry 18%); offshoring to India 70% (from 60%); pricing +2-3% annually. Guides 16-17% EBITDA FY26.
M&A & Investments: ₹500 Cr war chest for tuck-ins in AI/cloud; recent bolt-ons like WebSource (data mgmt) boost capabilities.
Sector Tailwinds: BFSI digitisation, manufacturing re-shoring, healthcare AI; $1 Tn global IT spend growth by 2027 favours mid-tier agility. Expects 12-14% CAGR to FY28.