Bengaluru: Zensar Technologies is prioritizing larger acquisitions over smaller tuck-ins, as it looks to scale through inorganic growth. “The effort, whether it’s a $20 million or $200 million acquisition, is almost the same. So why not go in for something bigger?” CEO Manish Tandon told TOI after the earnings on Monday.Rather than chasing specific technologies, the company is focusing on client depth. “It is very important that we get good client relationships in the asset… if relationships are deeper, we can sell multiple services.”Zensar is also cautious about AI-led acquisitions. “We are not proactively looking at AI assets… they are very expensive. And suddenly every company has become an AI company, so we must separate the wheat from the chaff.” Responding to reports of a potential deal, Tandon said, “We continue to have ongoing conversations with companies, but that does not necessarily mean there is a deal on the table.”The company reported modest growth for FY26, with revenue of $643.7 million, up 3.1% in dollar terms and 1.7% in constant currency. March quarter revenue stood at $158.4 million, a 1% increase year-on-year but a 1.3% decline sequentially.“This has been a quarter of modest growth,” Tandon said, attributing it to delays in deal closures. “Deals are getting pushed out… but really against our own expectations rather than anything structural.” He noted that a megadeal expected in Q3 slipped to Q4 as negotiations extended.A tougher demand environment has intensified competition, with large IT firms entering smaller deals. “If the market is tough, competitive intensity is very high… we are seeing tier-1 players in deals which in the past were too small for them,” he said, adding some are “writing checks to buy the team.”At the same time, this creates openings for mid-sized firms. “For smaller players, it’s an opportunity—we can use AI to differentiate and go after incumbents’ business.”Despite AI-led pricing pressure, Zensar sees long-term upside. “Previously, we would say 30% productivity improvement, now we are saying maybe 40–50%.”The company is holding margins steadily. “We are not looking at shrinking our margins… we are becoming more price competitive but not looking at margin dilution.”AI is also reshaping hiring. “Fresher hiring… will continue to be under stress,” Tandon said, adding the focus is shifting to quality talent and domain expertise.
