Zensar Technologies reported a 1.1% revenue growth in Q1 FY27, even as quarterly profit declined by 12.8% to INR 1,838 million. While the BFSI sector provided support, significant declines in TMT, HLS, and MCS segments weighed on performance. Investors are evaluating the sharp 63% drop in new deal wins, which may impact future revenue visibility.
Zensar Technologies has released its financial results for the first quarter of fiscal year 2027, highlighting a mixed performance across its business segments. The company reported a 1.1% sequential increase in revenue on a constant currency basis, a metric that measures revenue growth excluding the impact of foreign exchange fluctuations. While this met market expectations, the broader business health shows pockets of weakness that investors may need to monitor closely.
Sector Performance and Margin Pressures
The company’s performance was supported by its Banking, Financial Services, and Insurance (BFSI) segment, which recorded a robust 8.3% quarter-over-quarter growth. However, this growth was offset by contractions in other major areas. The Technology, Media, and Telecom (TMT) segment saw a sharp decline of 9.1% sequentially, while Healthcare and Life Sciences (HLS) and the Manufacturing, Communication, and Services (MCS) divisions fell by 3.8% and 2.3%, respectively.
Profitability also felt the impact of these shifts. The reported EBIT margin for the quarter stood at 12.8%, representing a 190 basis point drop compared to the previous quarter. Although the adjusted profit after tax of INR 1,838 million was slightly better than some analyst estimates, it remains 12.8% lower on a sequential basis.
New Deal Wins and Future Visibility
A critical monitorable for investors is the company's deal pipeline. The Total Contract Value (TCV) of new deals won during the quarter fell significantly to USD 149 million. This figure reflects a 62.9% drop sequentially and a 13.3% decline compared to the same period last year. A lower TCV, resulting in a book-to-bill ratio of 0.9x, indicates that the company is currently converting existing orders into revenue faster than it is replenishing its order book.
Moving forward, the primary concern for stakeholders will be whether the company can stabilize its non-BFSI segments and improve its deal-win momentum. With brokerage firms projecting a revised EBIT margin of approximately 13.4% for FY27, the ability of the company to manage operational costs while navigating a cooling demand environment in sectors like TMT and HLS will be key to its performance in the coming quarters.