Zensar Technologies Stocks: Add Zensar Technologies; Target price Rs 243: ICICI Securities | Techno Glob


Called on Zensar Technologies with a target price of Rs 243. The current market price is Rs 215.15.




., a Mid Cap company (with a market cap of Rs 4882.40 crore in the IT software sector) incorporated in 1963.

Zensar Technologies Ltd. The major product/revenue segments for the year ending 31-Mar-2022 include software development fees and other services and software products.

Finance

For the quarter ended 30-09-2022, the company posted a total revenue of Rs.1263.00 crore; The total revenue for the last quarter was Rs 1224.70 crore, a growth of 17.65% from the total revenue of Rs 1073.50 crore in the same quarter last year. The company reported a net profit after tax of Rs 56.80 crore in the last quarter.

Investment Rationale
We downgrade Zensar to ADD (Early-Buy) as we believe the supply-side engine is weak due to the current challenging macro-environment with consumers cutting/suspending discretionary spending. It can limit revenue growth. Hence, EPS estimates for FY23E/FY24E have been cut by 5.3%/1.6% respectively. We continue to value Zensar at 13x FY24E EPS to reach a target price of Rs 243. The stock is currently trading at 17x/11x FY23E/FY24E EPS of Rs12.6/Rs18.7.


Promoter/FII Holdings
Promoters hold 49.16 per cent stake in the company as on 30-Jun-2022, while FIIs hold 15.95 per cent; DIIs own 13.9 percent.

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