ZENSARTECH

’s $1B Revenue Goal Hit by Cisco Rationalization

is facing client concentration risk, with Cisco Systems—one of its top five clients—expected to reduce business allocation. The move is part of Cisco’s broader vendor rationalization and discretionary spend cuts, a trend impacting several mid-tier Indian IT firms. Zensar’s Q3FY26 revenue declined 1.4% QoQ to $160.5 million, with weakness concentrated in the telecom, media, and technology (TMT) vertical, which includes Cisco. Client Pressure and Revenue Impact - Cisco contributes ~$40 million annually, or ~6% of Zensar’s total revenue. - Revenue from Cisco has been declining, and further cuts could slow Zensar’s path to its $1 billion revenue goal. - Zensar joins peers like Hexaware, Mphasis, LTIMindtree, and Sonata Software, all of whom have faced similar top-client pressures in the past year. Q3FY26 Performance - Revenue: $160.5 million, down 1.4% QoQ. - TMT vertical declined 8.7% QoQ in constant currency, largely due to furloughs and reduced spend from Cisco. - Rest of the business grew just 0.3% QoQ, indicating broad-based softness. Strategic Challenges and Outlook - Vendor consolidation and spend discipline by global clients are impacting mid-tier IT firms disproportionately. - Zensar has ended two of the last five years with full-year revenue declines, raising concerns about growth consistency. - CEO Manish Tandon faces the challenge of steering Zensar toward its aspirational $1 billion revenue target by FY27, amid top-client churn and vertical-specific headwinds. Brokerage and Industry Commentary - Brokerages remain cautious, citing near-term growth concerns. - HFS Research CEO Phil Fersht noted that Cisco’s actions reflect a broader industry shift toward vendor rationalization and cost control. - Zensar is now exploring growth opportunities outside the TMT vertical, but execution will be key.