Interim dividend for IT shares declared; record date is the next week

Interim dividend for IT shares declared; record date is the next week

The interim dividend was declared by the board of directors of Zensar Technologies Ltd. at Rs 1.50 per equity share of Rs 2 each (i.e., 75%) for the fiscal year 2022–2023; the record date for the dividend was set for the next week on Friday, February 3, 2023.

“This is to inform you that the Board of Directors (Board) of the Company at its meeting held today approved the declaration of an Interim dividend of INR 1.50 per equity share of INR 2 each (i.e., 75%) for the FY 2022-23. The record date has been fixed as Friday, February 3, 2023, in line with our intimation dated December 30, 2022, for the interim dividend and related matters. The interim dividend on the equity shares shall be paid/dispatched to the shareholders within 30 days from the date of declaration," the IT company informed in an exchange filing earlier this week.

Further, the board also approved the appointment of Manish Tandon as Chief Executive Officer and Managing Director (‘CEO and MD’), of the Company, for a term of 5 years effective from January 23, 2023, to January 22, 2028 (both days inclusive), subject to Members and other applicable approval(s).

“Zensar reported modest Q3FY23 numbers – revenue declined 5.3% QoQ CC to $146 mn, below our estimates of -3.5% QoQ CC decline. EBIT margin expanded +250bp QoQ to 7.1%, beating our/Street’s forecasts of 5.7%. At Rs 765 mn, PAT was ahead of our/Street’s estimates of Rs 661mn/620mn – driven by the margin beat. Deal wins at $130.5 mn (+4.2% YoY) were modest," highlighted Edelweiss in a note.

Zensar is undergoing a management transition, which, along with the reduction in overall client spending (in CY23) is likely to lead to medium-term underperformance, it said. “While we see strong sustainable demand (transformational/cost-takeout deals) driving growth for the sector – Zensar is likely to underperform, primarily due to its relative inability to win cost-takeout deals and the ongoing management transition. Inexpensive valuations limit the downside potential," the brokerage added.