Pune-based IT and BPO services firm Zensar Technologies Ltd (ZTL) is close to making two acquisitions in Germany and Switzerland.
Transactions in the $10-12m range to be sealed early next fiscal
MUMBAI: Pune-based IT and BPO services firm Zensar Technologies Ltd (ZTL) is close to making two acquisitions in Germany and Switzerland.
A source said two deals in the $10-12 million range would be sealed early next fiscal. The transactions could be all-cash with earn-outs to be paid over a stipulated period.
Ganesh Natarajan, deputy chairman and managing director, Zensar Technologies Ltd conceded that talks on the two acquisitions were at advanced stages and could be sealed early next fiscal. However, he did not divulge further details.
Zensar expects new orders worth $5.5-6 million for enterprise business this quarter.
The company also plans to add 600 people this quarter, Natarajan said on the sidelines of the Nasscom India Leadership Forum 2008.
In the past five months, Zensar has added 17 clients, eight of them in new service segments, and secured several deals in the sub-$5 million category. It has seen an average 10-11% higher pricing in new deals and 2-7% in existing contracts. Long-term contracts account for close to 60% of its revenues.
During Q3FY08, it witnessed a sequential revenue growth of 3.8% to Rs199.2 crore and a 134 basis points expansion in Ebidta margins to 11.8%.
Analyst Vibha Salvi of IL&FS Investsmart Securities said in a note to clients that stronger profitability and improved margins across segments were expected for the company due to higher pricing, better utilisation, increase in offshore work, and higher margins in large consulting deals. However, any sharp appreciation in the rupee might hurt Zensar, said the note. Moreover, the services industry depends heavily on manpower and a higher-than-expected wage inflation of 12-15% at offshore locations could impact the company’s profitability.
r_mithun@dnaindia.net
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