186.95 -0.65 (-0.35%)
NSE Oct 29, 2020 15:31 PM
Volume: 93,515
 

Zensar Technologies Ltd.    
16 May 2020
186.95
-0.35%
HDFC Securities
We cut our FY21/22E rev est. by 5.7/5.8% to factor uncertainty. Increase FY21/22E EPS est. by +2.2/+3.9% due to margin reset. Our TP of Rs 98 is based on 8x (~30% discount to 5Y avg.) FY22E EPS. Maintain ADD. Zensar registered strong margin recovery (+705bps QoQ) but revenue decline was higher than estimate. The deal pipeline continues to be robust (USD 1bn) but TCV has slowed down (-25% YoY) due to Covid-19 related uncertainty. Digital is the key revenue driver but Legacy drag (-9.7% in FY20) is weighing on growth. Delay in decision making, pricing pressure, cut in discretionary spending and high exposure to Hi-Tech, Manufacturing and Retail will pose growth challenges in FY21E.
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Number of FIIs/FPIs holding stock rose by 18 to 91 in Sep 2020 qtr.
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