Pune: City-based technology firm Zensar Technologies said it expects to close a deal in the next quarter to sell its third-party maintenance business and focus on its core digital, cloud, and information technology businesses going forward.
“We plan to invest more in our core businesses as we have a base in countries like the US and South Africa, among others. The third-party maintenance business, under the PSI Group, is no longer a focus for us, which is why we have identified a buyer and hope to complete the deal next quarter,” Zensar CEO and managing director Sandeep Kishore told TOI while discussing their Q2 results.
Kishore said they have decided to focus on digital business due to an increasing share (nearly 60%) of its revenue coming from it — a lion’s share of potential clients are expected to avail themselves of Zensar’s digital services, including app support and real-time data monitoring. On the company severing ties with clients, Kishore said it was a conscious choice to have “fewer clients and deeper relationships”.
Zensar reported revenues of around Rs979 crore for Q2, down around 9% over the corresponding quarter last year. The potential sale of its third-party hardware maintenance business to the US-based Service Express — subject to board and shareholder approval — is expected to fetch Zensar around Rs89 crore.
The company’s stock closed at Rs177.95 at the Bombay Stock Exchange on Friday, dipping by around 4.8%.
Kishore said that the firm’s cash position has improved, helping it to pay off a significant portion of its debt. While its rate of attrition has reduced significantly over the corresponding quarter last year, it has also shed its headcount by over 1600 employees.
“Our normal attrition rate is around 15%. We have not done any significant backfill in the recent period, and given the business situation, we are managing our costs very strictly. Our headcount will increase next quarter onwards, as our business stabilizes and marginally grows,” he added.
He also expects their way of working after the pandemic to return to a hybrid home-and-office model. “Permanently working from home is not feasible. We need to find the right balance. We have settled on working from home during the coming few months. It certainly won’t be the same after the pandemic; there will be a hybrid model,” he said.