Anant Goenka appointed as interim MD of Zensar Tech

Anant Goenka, managing director at Ceat Ltd, has been tasked with the additional responsibility of steering Zensar, prompting a few analysts and proxy advisory firms to question the succession planning at the country’s tenth largest IT services company.

“This is to inform you that the board of directors (Board) of the company at its meeting held today, pursuant to the recommendation(s) of Nomination and Remuneration Committee and Audit Committee, unanimously approved appointment of Mr. Anant Goenka, as interim managing director of the company, effective immediately, as Ajay Singh Bhutoria, chief executive officer and managing director has experienced a health ailment and would be able to resume his normal activities only after he recovers from the ailment,” Zensar said in a filing made to the exchanges on 2 November.

“Mr. Anant Goenka has been appointed for a term up to the next annual general meeting of the company or 31 July 2023 whichever is earlier subject to requisite approvals under the relevant regulations, as an interim arrangement till Ajay Singh Bhutoria fully recovers to attend office. There would be no remuneration payable to Anant Goenka in his capacity as interim managing director.”

Two executives said Zensar could have promoted someone from the executive leadership instead of Goenka, who was inducted into the board as a non-executive director in 2019.

“In situations where a CEO steps aside, someone from the executive leadership team is promoted to lead the company. This is because the executive leader knows clients and the delivery (backend of business),” said a Mumbai-based analyst at a foreign brokerage.

An email seeking comment from Zensar went unanswered.

Zensar hired former Cognizant executive Bhutoria in December 2020 to revive the fortunes of the firm that has struggled over the last decade-and-a-half to create an identity for itself.

Bhutoria started well amid booming demand for IT services during the pandemic—Zensar reported $569.4 million in revenue in the year ended March 2022, a 15.2% growth.

However, declining profitability and sluggish growth in the current financial year have once again made analysts and shareholders wary.

Zensar’s revenue slipped 0.5% sequentially from $155.9 million in the first quarter to $155 million at the end of 30 September. Operating margin declined from 7.1% to 4.5%.

Zensar’s underperformance mirrors investor sentiment as the company’s scrip is among the worst-performing IT shares this year. Zensar stock was down 60% between 1 January and 4 November while NSE-50 was up 2.4%.