7 months ago
Cisco Reduces Business with Zensar Amid Vendor Rationalization
Zensar Technologies, an Indian IT company, is getting less business from Cisco, one of its top clients.
Cisco is reducing the number of IT vendors it works with and cutting costs.
This is part of a bigger trend where global companies are choosing fewer vendors to save money.
Other Indian IT companies like Hexaware, Mphasis, LTIMindtree, and Sonata Software have also lost business from their largest clients.
Zensar's revenue from Cisco has been decreasing, which could slow down its goal to reach $1 billion in revenue.
The company is now looking to grow in areas beyond its current focus on telecom, media, and technology (TMT) sectors.
Cisco is reducing business with Zensar Technologies as part of vendor rationalization and cost-cutting measures.
Zensar is the fifth Indian IT firm in the past year to face pressure from a top client.
Zensar's revenue from Cisco is about $40 million annually, roughly 6% of its total business.
Zensar's revenue declined by 1.4% sequentially in Q3FY26, with significant weakness in the TMT sector.
Zensar's management is focusing on growth beyond the TMT sector to achieve its $1 billion revenue goal.
- Who
- Zensar Technologies Ltd and Cisco Systems
- What
- Cisco is reducing business with Zensar as part of vendor rationalization
- Where
- Global, with significant operations in India and the US
- When
- The changes are ongoing, with impacts seen in recent quarters
- Why
- Cisco is tightening discretionary spending and reducing the number of IT vendors it works with
Key facts
- Company
- Zensar Technologies Ltd
- Client
- Cisco Systems
- Revenue from Cisco
- $40 million annually
- Zensar's Total Revenue (Q3FY26)
- $160.5 million
- Zensar's Annual Revenue (FY25)
- $624.5 million
- Cisco's Annual Revenue (FY25)
- $56.7 billion
- Zensar's Revenue Goal
- $1 billion
- TMT Sector Revenue Decline
- 8.7% q-o-q
Quotes
Manish Tandon
Chief Executive Officer of Zensar Technologies
“There is no point in saying TMT, TMT, TMT. I mean, let's get beyond it now. And now the proportion of TMT to the overall mix has come down from the past. So that is what we want to look forward and look ahead. Not on the basis of – and still deliver, try and deliver growth, despite whatever happens in TMT.”
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“As for TMT, I mean, my commentary has been consistent. That we are seeing a lot of spend moving away from services to AI (artificial intelligence), capital investment towards AI, particularly in buying hardware, et cetera. So I am not looking at TMT improving significantly.”
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Girish Pai and Lopa Notaria
Analysts at Bank of Baroda Capital Markets
“When the current CEO stepped in, he aspired ZENT (Zensar Technologies) to move up one quadrant a year at a time from a revenue growth standpoint to the leaders quadrant in year 4 (FY27). FY24 being the first year, it was at the bottom most quadrant—on revenue growth—but focused on getting margins to peer matching levels. That happened rather quickly in FY24”
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“Getting into the leader’s quadrant by FY27 would require buildup of both sales and delivery muscle and significant capabilities in efficiency-based projects. ZENT is yet to generate confidence in us to get to the leader’s quadrant in growth by FY27 (which will largely be dominated by better performing tier-II companies)”
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Phil Fersht
Chief Executive Officer of HFS Research
“What appears to be happening is this is forming part of a broader Cisco-led vendor rationalization and spend discipline effort. Cisco is tightening discretionary spend, reducing lower-value staff augmentation work, and prioritizing fewer vendors that can deliver higher-value, outcome-oriented programs, particularly around AI, cloud, and platform modernization.”
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Sandeep Shah and Deep Modi
Analysts at Equirus Securities
“Excluding TMT (which was down 8.7% q-o-q (quarter-on-quarter) in CC (constant currency) terms in 3Q due to higher furloughs esp. in the top client), qoq growth in rest of the business was also soft at 0.3% q-o-q in 3Q”
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