Zensar Technologies Ltd. share price target

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We recommend a BUY on Zensar, aided by strong revenue growth momentum and better recovery. We assign 22x P/E multiple to its FY24E earnings of Rs. 24.25 per share to arrive at a TP of Rs 540 per share, implying an upside of 13% from CMP.

Background: Zensar is a leading digital solutions and technology services company that specialises in partnering with global organizations across industries on their Digital Transformation journey. A technology partner of choice, backed by strong track-record of innovation; credible investment in Digital solutions; assertion of commitment to client's success, Zensar's comprehensive range of digital and technology services and solutions enable its customers to achieve new thresholds of business performance. Zensar, with its experience in delivering excellence and superior client satisfaction through myriad technology solutions, is uniquely positioned to help them surpass challenges around running their existing business most efficiently, helping in their legacy transformation, and planning for business...

Zensar posted strong revenue growth of +11.6% QoQ USD, 12.3% QoQ CC much higher than our and cons estimates (Ple: 9.1%, Cons: 8.2%). Revenue beat was led by higher than expected growth of 5.4% QoQ USD (Ple: 3.5%) in Organic business. M3bi also showed strong performance contributing $7.9 mn (Ple: $7.15 mn) vs quarterly run-rate of $6.68 mn in CY20. Growth was broad-based & strong revenue growth momentum is expected to continue in H2, however there will be element of furlough in Q3. Zensar reported strong deal TCV of $187.5 mn, +94% QoQ, 7% YoY (vs...

Background: Zensar is a leading digital solutions and technology services company that specialises in partnering with global organizations across industries on their Digital Transformation journey. A technology partner of choice, backed by strong track-record of innovation; credible investment in Digital solutions; assertion of commitment to client's success, Zensar's comprehensive range of digital and technology services and solutions enable its customers to achieve new thresholds of business performance. Zensar, with its experience in delivering excellence and superior client satisfaction through myriad technology solutions, is uniquely positioned to help them surpass challenges around running their existing business most efficiently, helping in their legacy transformation, and planning for business...

We assign a 22x P/E multiple to its FY23E earnings of Rs 20.8 per share to arrive at a TP of Rs 455 per share, implying an upside of 13% from CMP.

ZENT reiterated its GTM strategy under the new leadership of Mr. Ajay Bhutoria. It reiterated its focus on five strategic growth opportunities (SGOs) to better target the enterprise market. ZENT expects its capabilities under Experience Services (c10% of revenue) to fuel business in Advanced Engineering Services, Data Engineering, Analytics, and Infra Services....

Historically, the company suffered due to lower focus on core business of Oracle, unstructured verticals & sales, leakage in revenues due to project ramp downs and higher share (~55% of revenues) in commoditised business. Zensar has addressed some concerns through acquisition of experience companies like Indigo Slate & foolproof. The new CEO has also devised a new strategy to address the vertical structure by focusing on core business experience and build on digital engineering, data analytics, machine learning. Further, Zensar will invest in cloud hyperscaler and do...

We recommend HOLD and assign 15x P/E multiple to its FY23E earnings of Rs. 18.8 per share to arrive at a TP of Rs. 285 per share, implying an upside of 6% from CMP.