Shares of Zensar Tech likely to dip on Wednesday on poor numbers

Shares of Zensar Technologies Ltd are likely to fall on Wednesday as the company has reported a decline in both revenue and profit compared to the preceding quarter.

The company, which provides outsourcing and IT services, said revenue fell 1% to Rs 594 crore, while net profit fell nearly 30% to 50.7 crore.

The company was hit by a seasonal decline in the quarter, as well as a substantial jump in expenses.

Expenses on purchase of traded goods, for example, increased to 59.6 crore in the December quarter from 43 crore in the previous quarter.

Employee expenses rose from 327 crore to 331 crore.

The company had other income of negative 5.7 crore compared to positive net income of 16.4 crore in the previous quarter, possibly reflecting currency fluctuations.

Shares of Zensar Tech have been going up for several months, ever since the company reported its last quarter results.

It was expected that Zensar would benefit from rising IT demand in the US, along with larger peers. However, mid sized companies are largely tending to disappoint, even as biggies like TCS find it hard to maintain strong quarter on quarter growth.