Zensar Technologies reported a 2% revenue growth in constant currency for the September quarter, driven by strong demand in its banking and financial services segment. While the company is winning more AI-led projects, it reported a slight dip in profit margins and faced significant revenue declines in its telecom and healthcare businesses.
Zensar Technologies reported a 2% year-on-year revenue growth in constant currency for the quarter ended September 2026, supported by a 4.1% gain compared to the previous quarter. The company’s operating profit margin, or EBIT margin, was 13.4%, which is 30 basis points lower than the same period last year. This slight dip in profitability comes as the company invests in its transition toward newer service models.
The most positive contributor to the company’s performance was its banking and financial services division. This unit grew by 17.1% year-on-year and 7.1% quarter-on-quarter. The United States market remains a key region for the firm, contributing to a 2.5% revenue expansion, while operations in Africa also saw growth.
However, the company’s performance was not uniform across all sectors. The healthcare and life sciences division saw a revenue decline of 9.9% year-on-year. Furthermore, the telecom, media, and technology business faced a sharper contraction of 21.6%. These segments are currently struggling as clients in these industries reduce spending, presenting a challenge that investors should monitor alongside the strong growth seen in banking.
Transition to AI-Led Contracts
A major focus for Zensar under CEO Manish Tandon is the integration of Artificial Intelligence into its core service offerings. AI-driven projects now account for 36% of the company's total order book. The company is actively moving away from traditional time-and-materials contracts—where clients pay based on the hours worked—toward outcome-based models. In these newer contracts, payment is linked to the success or specific results delivered by the technology, which the company believes is essential for remaining competitive.
This shift in business model also requires a change in talent strategy. The company is prioritizing engineers who can use AI tools to perform complex tasks, rather than focusing on basic coding skills. This focus on AI-ready talent was reflected in the company's hiring, with a net increase of 978 employees during the quarter, bringing the total staff count to 12,320.
Looking ahead, the sustainability of the company's growth will depend on how quickly it can secure the $30 million in deals currently awaiting final documentation. Investors may want to track whether the company can stabilize its profit margins as it balances the strong performance of its banking unit with the ongoing weakness in its telecom and healthcare segments.