Prabhudas Lilladher's research report on Zensar Technologies
Zensar’s revenue growth (+5.8% QoQ USD) is back after seven quarters of muted growth, indicating new management’s (CEO Mr. Ajay Bhutoria joined in Jan 21) refreshed strategy is headed in right direction. Strong performance was driven by HiTech (+13.4% QoQ USD) and Banking (+4.8% QoQ) while rest of the verticals showed muted growth. Deal win TCV was soft at $96.7 mn vs quarterly average TCV of $150 mn in FY21 largely due to conservatism of management in reporting TCV. Management mentioned that they have signed good amount of new logos this quarter and expect it to reflect in order book as they start delivering.
We value Zensar on Sep23 EPS (roll over) of INR 23.6 to arrive at a changed TP of INR 424 (earlier: 290). Zensar is currently trading at multiples of 23.1/18.5 on EPS of 17.4/21.6 on FY22/23 respectively. Maintain Buy.
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