Buy Zensar Technologies; target Rs 540: Sushil Finance

“Zensar Technologies has delivered a decent performance during the quarter driven by a 3.0% QoQ volume growth. The margins also improved on QoQ basis during the quarter, mainly due to effective cost management and change in effort mix, more towards offshore. Going forward, in view of its decent Q1FY11 numbers and the expected outlook for FY11, we have slightly adjusted our FY11E & FY12E Revenues estimates, but retain our FY11E & FY12E APAT estimates. We expect its consolidated revenues to grow by 10% & 12% in FY11E & FY12E respectively and its APAT to grow by 8.6% & 5.6% in FY11E & FY12E respectively (slower APAT growth mainly due to higher tax rate expected in FY11E & FY12E). At CMP of Rs 358, the stock is trading at a very attractive valuation of 5.6x & 5.3x its FY11E & FY12E EPS respectively. We maintain our buy rating on the stock with a target price of Rs 540 (based on 8x its FY12E EPS of Rs 67.4),” says  Sushil Finance research report.

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