Add Zensar Technologies, target price Rs 243: ICICI Securities

ICICI Securities has add call on Zensar Technologies with a target price of Rs 243. The current market price of Zensar Technologies is Rs 215.15.

Zensar Technologies Ltd., incorporated in the year 1963, is a Mid Cap company (having a market cap of Rs 4882.40 Crore) operating in IT Software sector.

Zensar Technologies Ltd. key Products/Revenue Segments include Software Development Charges & Other Services and Software Products for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-09-2022, the company reported a Consolidated Total Income of Rs 1263.00 Crore, up 3.13 % from last quarter Total Income of Rs 1224.70 Crore and up 17.65 % from last year same quarter Total Income of Rs 1073.50 Crore. Company reported net profit after tax of Rs 56.80 Crore in latest quarter.

Investment Rationale
The brokerage downgrades Zensar to ADD (earlier: Buy) because we believe weak supply-side engine, coupled with cut down/deferment of discretionary spends by clients in consumer services / hi-tech / manufacturing verticals due to the currently challenging macro-environment, may limit earnings growth ahead. Accordingly, EPS estimates for FY23E/FY24E are cut by 5.3%/1.6% respectively. It continues to value Zensar at 13x FY24E EPS to arrive at a target price of Rs243. Stock is currently trading at 17x/11x on FY23E/FY24E EPS of Rs12.6/Rs18.7.

Promoter/FII Holdings
Promoters held 49.16 per cent stake in the company as of 30-Jun-2022, while FIIs owned 15.95 per cent, DIIs 13.9 per cent.