Zensar Technologies Ltd., incorporated in the year 1963, is a Mid Cap company (having a market cap of Rs 9056.43 Crore) operating in IT Software sector.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 955.20 Crore, up 8.19 % from last quarter Total Income of Rs 882.90 Crore and down -5.35 % from last year same quarter Total Income of Rs 1009.20 Crore. Company reported net profit after tax of Rs 102.60 Crore in latest quarter.
Investment Rationale
The brokerage expects revenue growth to rebound from 2HFY22E as a new leadership (Mr. Ajay Bhutoria took over in Jan’21), refreshed strategy, and reinvestment of margin gains in sales start paying off. With a likely return to double-digit growth in FY23E (est. 19% YoY) on a good FY22 exit and recovery in key accounts, it sees a potential for significant stock re-rating as valuations catch up with its peer group. The brokerage also see higher downside protection in the share price at current levels, as 15% of ZENT’s m-cap is in cash v/s only 8% for its midcap IT Services peers. Its TP implies 21x FY23E EPS.
Promoter/FII Holdings
Promoters held 49.2 per cent stake in the company as of June 30, 2021, while FIIs held 17.1 per cent, DIIs 21.1 per cent and public and others 12.6 per cent.
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