Zensar Technologies Ltd. share price target

Delivered better-than-expected revenue and margin. After a mid-single digit FY25, revenue growth in double digits in FY26 likely

ZENT reported a decent 3QFY25, with revenue growth of 0.7% QoQ CC (est. flat growth), driven by Manufacturing & Consumer services (up 6.5% QoQ CC) and Healthcare & Lifesciences (up 3.2% QoQ CC).

Weak QoQ growth due to client specific issues in TMT vertical whereas BFSI and HLS show good traction.

We maintain our HOLD recommendation on the stock.

We maintain our recommendation to HOLD the stock

ZENT reported a strong 1QFY25, with revenue growth of 4.3% QoQ in CC (est. 1.9%) driven by sequential growth across all verticals. Deal TCV came in at USD154m (-15% QoQ/flat YoY).

We recommend a HOLD rating on the stock and assign a 24x P/E multiple to its FY26E earnings of Rs 29.8/share to arrive at a TP of Rs 710/share. The TP implies an upside of 6% from the CMP.

The company's promising recovery prospects bolstered by favourable business deals and enhanced customer retention, we maintain our recommendation to HOLD the stock.

Recommendation: The demand scenario in the majority of the verticals remains sceptical, which will impact revenue growth momentum in the near term. Given the company's strong recovery potential, supported by good business deals and improved customer retention, we maintain our HOLD recommendation

The demand scenario from the majority of the verticals remains sceptical, which will impact revenue growth momentum in the near term. Given the company's strong recovery potential, supported by good business deals and improved customer retention, we maintain our HOLD recommendation

Given the company's strong recovery potential, which is supported by good business deals and improved customer retention, we maintain our Hold recommendation for the stock.

Given the company's strong recovery potential, which is supported by good business deals and improved customer retention, we maintain our Hold recommendation for the stock.

Zensar reported a strong EBITDA margin expansion of c.425bps QoQ, while the revenue growth was soft (+1.3% QoQ in cc terms). The strong margin improvement for the second consecutive quarter was on account of SG&A rationalization, higher utilization, better productivity & business mix and a c.100bps one-time benefit.