Analyst Meet / AGM - Analyst Meet
Robust pipeline and expects good FY'15
Zensar Technologies announced the results for the quarter ended June 2014 and recently held a conference call to discuss the results and future growth strategies. The Key takeaways of the call are as follows.
Highlights of the call:
The revenues grew by 0.4% QoQ (14% YoY) to Rs 604.78 crore for the quarter ended June 2014 and PAT grew by 1.3% QoQ to Rs 55.96 crore for the same period. In USD terms, The Revenues grew by 3.8%QoQ (6.6% YoY) to USD 101.29 million for the quarter ended June 2014.
In USD terms, the application business grew by 4.6% QoQ, Infrastructure business grew by 2.5% QoQ and products & Licenses and 1.5% QoQ during the quarter.
The Enterprise Application business grew by 6.3% QoQ in dollar terms, in particular the US market grew by double digit growth during the quarter. There is good materialization of the order book in the US and Europe markets. Also, India is growing well.
The margins were impacted due to 1) rupee appreciation 2) large project starting in South Africa - there are visa delays and people are on bench 3) large client project delay.
In the IMS, it wants to rebalance in favor of the high margin business. It started cost optimization initiatives during the quarter and seen success and will see full impact in the next quarter.
The volatility of the product revenues remains a concern.
The company has booked and executed excellent business in both applications and infrastructure services in key markets. It's many of new services including Digital Transformation and Total Infrastructure Outsourcing services have received encouraging response from existing and new customers.
The rebalancing of the IM portfolio is on track with a conscious focus on increasing dual shore services with existing and new customers. In this quarter 33.3% of IM revenues have come from dual shore services in comparison with 30.2% in the previous quarter and 29.9% for FY14. The services business has witnessed a sequential growth of 11.2% and year-on-year growth of 11.8%.
The company reported the addition of 12 new significant clients and 103 new employees this quarter.
In the application business it had excellent quarter on the back of 1) there are many big deals in past 4 quarter and signed few in last two quarters and revenue flow came in Q1. The many deals are coming from the US and Europe. 2) The challenges in the Emerging market earlier had turnaround 3) focus also on the domain led business 4) new order book is also good.
The loan outstanding in books is USD 18 million (paid 6 million in Q1) Cash on hand Rs 309 crore as on 30th June 2014. The forex cover is USD 28 million@68.44
The Capex is Rs 7 crore during the quarter.
It has robust pipeline and expects good FY'15.
The Total order pipeline is USD 400 million and the large orders are 55% in IM area and the reset in the application services. It has excellent pipeline to meet the targets going forward.
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