IT service provider Zensar Technologies Limited’s shares touched their 52-week low on Wednesday’s early trades. Its share price dropped by 11.81% in the past five days to reach its 52-week low of ₹ 221.75 apiece.
The company’s revenue jumped 28.46% from ₹ 936.80 crores in June 2021 to ₹ 1203.40 crores in June 2022. However, its quarterly net profit is down 25.64% from ₹ 101.00 crores in June 2021 to ₹ 75.10 crores in the latest quarter. Its EBITDA stands at ₹ 157.40 crores in June 2022 down 17.59% from ₹ 191.00 crores in June 2021.
Zensar Technologies Limited was incorporated in 1963 and is a mid-cap company with a market capitalization of ₹ 5,308 crores. Its key products and revenue segments include software development charges, other services and software products. Brokerages see an upside of up to 79% on the company’s shares.
HDFC Securities expects that the company’s USD revenue will grow by 12.2/10.1% and EBITDA margins of 11.8/13.6% for FY23/24E, resulting in revenue/EPS CAGRs of +11/5% over FY22- 24E.
It has a buy call on the shares of Zensar Technologies with a target price of ₹ 315.00, achievable within one year. The shares are currently trading at ₹227.55 apiece. This translates to an upside of 34.47%.
“Management noted that it faced high supply-side pressure, which impacted margins; revenue growth remains strong and delivered its highest USD revenue to date. It has pushed the mid-teen margin target by a couple of quarters to Q2FY24E. We are cutting FY23E/FY24E EPS by 4.8%/1.3% to incorporate the earning miss,” said ICICI Securities while retaining a ‘Buy’ rating with an unchanged target price of ₹406.
The given target implies an upside of 78.42% as compared to the current market price of ₹ 227.55.
Written by Simran Bafna
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