Q4FY21 Company Update - Zensar Technologies - ICICI Direct

Zensar Technologies (Zensar) reported a poor set of Q4FY21 numbers. The company's revenues declined 3.4 QoQ in constant currency (US$120.2 million) mainly led by 3.8% and 2.1% decline in hi-tech and manufacturing, respectively. EBITDA margins declined 70 bps QoQ to 19.9% mainly led by wage hike. PAT declined 8.3% QoQ to Rs. 90.5 crore. The order book declined 50% to US$100 million due to deferral of deals in BFSI. The company has declared a dividend of Rs. 2.4/share.

Valuation & Outlook

The company under the new CEO is focusing on improving client mining, new logo addition and driving sustainable & profitable growth. This coupled with investment in sales, leadership and tuck in acquisition to build capability bodes well for long term revenue growth. In addition, healthy margins prompt us to upgrade the stock. Hence, we upgrade the stock from HOLD to BUY with a revised target price of Rs. 315 (14x PE on FY23E EPS) (earlier target price Rs. 260).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Zensar_CoUpdate_Apr21.pdf

Shares of ZENSAR TECHNOLOGIES LTD. was last trading in BSE at Rs.265.25 as compared to the previous close of Rs. 267.85. The total number of shares traded during the day was 29304 in over 1226 trades.

The stock hit an intraday high of Rs. 270.35 and intraday low of 255. The net turnover during the day was Rs. 7813075.

Source : Equity Bulls

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