Zensar Technologies(NSE:ZENSARTECH), a publicly traded software and services company and part of the $4.4 billion RPG Group, reported strong financial results for Q3 FY26, characterized by significant profit growth and margin expansion despite relatively muted revenue gains.
The company reported a consolidated net profit of ₹1,998 million, a 25.03% increase year-on-year, and consolidated revenue of ₹14,307 million, up 7.93% YoY. The quarter was defined by significant operating margin expansion to 17.47%, representing a remarkable 185 basis points improvement YoY and a 199 basis points improvement sequentially. This was achieved despite a decelerating sequential revenue growth rate of only 0.66%, reflecting a tepid demand environment.
Key Performance Metrics and Segment Trends
- Liquidity and Order Book: The company maintains a fortress-like balance sheet with net cash and equivalents of $322.4 million. The current order book stands at $180.2 million, showing a sequential increase of 13.6%.
- Vertical Performance: The Banking and Financial Services (BFSI) vertical led growth with a 12.2% YoY increase, whereas the Telecommunication, Media, and Technology (TMT) segment faced significant headwinds, declining 11.6% YoY.
- AI Pivot: Zensar is aggressively transitioning into an “AI-native” technology services provider; nearly 20% of its current order book is now AI-influenced.
- Shareholder Value: The Board declared an interim dividend of ₹2.40 per equity share (120%), with a record date of January 29, 2026.
- Exceptional Items: Profit was slightly impacted by an exceptional expense of ₹254 million related to statutory changes in Indian labor codes affecting employee benefit provisions.
Capital Efficiency
The company demonstrates high capital efficiency, reporting a Return on Capital Employed (ROCE) of 31.74%. The company employs over 11,000 people globally and continues to focus on enhancing shareholder value through consistent profitability and dividend declarations
Market Situation and Technical Outlook
- The broader Indian IT services sector continues to navigate a challenging environment where global clients remain cautious, prioritizing cost optimization over discretionary spending due to macroeconomic uncertainty. Despite Zensar’s profit surge, the stock has remained subdued, trading in a confirmed bearish trend below all key moving averages.
- A notable divergence in ownership has emerged: Foreign Institutional Investors (FIIs) have been consistent sellers, reducing their stake to 11.80%, while domestic mutual funds have been aggressive accumulators, increasing their holding to 20.60% as of December 2025.
Market Capitalization
Zensar Technologies has a market cap or net worth of INR16,425.68 Crore as of January 22, 2026. Its market cap has decreased by -8.95% in one year.
Impact on Company and Stock Performance
Subdued Market Reaction: Despite the profit surge, the stock remained subdued, trading at ₹716.00 (down 0.82%) or ₹703.45 (down 2.61%) following the announcement. This reflects investor caution regarding a decelerating pace of sequential revenue growth (only 0.66% QoQ) and broader sector headwinds.