Zensar Technologies shares rally 5%, stock up 17% in 3 days. Here're new share price targets
Zensar Technologies rose 5.24 per cent to hit a 52-week high of Rs 357.45 on BSE. ICICIdirect has a 12-month target of Rs 370 on the stock. Motilal Oswal Securities finds the stock worth Rs 390.
- May 15, 2023,
- Updated May 15, 2023 12:31 PM IST
Shares of Zensar Technologies Ltd climbed 5 per cent in Monday's trade, to take its three day winning run to 17 per cent. Analysts are largely neutral-to-positive on the stock after the IT firm's Q4 results. The IT firm's cash at 22 per cent of market capitalisation and free cash flow (FCF) yield at 10 per cent support valuations, they said.
Motilal Oswal Securities said attractive valuation and strong earnings growth would drive the stock performance going ahead. Calling its performance an operation reset, HDFC Institutional Equities has increase its EPS estimates by 15 per cent on hopes of better operational trajectory for FY24/25E, even as it trimmed its revenue estimate by 2-3 per cent, factoring in challenges in hi-tech and consumer verticals.
The stock rose 5.24 per cent to hit a 52-week high of Rs 357.45 on BSE. ICICIdirect has a 12-month target of Rs 370 on the stock. Motilal Oswal Securities finds the stock worth Rs 390. HDFC Institutional Equities has a target of Rs 445 for the stock. Nuvama, meanwhile, has a lower target of Rs 340 on the stock.
Zensar Technologies offers application & IMS services to hi-tech, manufacturing, retail and BFS sectors. It is net debt free and as healthy double digit return ratio. ICICIdirect noted that the stock has seen 1.4 times jump in price over the past five years from Rs 240 level in May 2018.
The IT company has added four services lines in the recent one to one and a half years, which has increased the addressable market and subsequently revenue growth opportunities, it said.
Among key triggers for the stock going ahead would be moderation of subcontractor costs, which is expected to be one of the levers for margin expansion, it said.
The Zensar management expects challenges in consumer and hi-tech verticals going ahead and cited the uncertainty in the current demand environment with delay in decision-making.
HDFC Institutional Equities is expecting dollar revenue growth of 3.7 per cent for FY24 and 9.3 per cent for Fy25. It sees Ebitda margin of 14.3 per cent for FY24 and 14.7 per cent for FY25E. The domestic brokerager is factoring in revenue and EPS CAGRs of 7 per cent and 31 per cent, respectively, over FY23-25E.
The key question, after the positive surprise in March quarter results, is the sustainability of this performance – which is difficult to answer with conviction given a foggy macro-environment and management transition, said Nuvama Institutional Equities, which has maintained its 'Hold' rating on the stock post March quarter results.
Also Watch: Tata Motors shares at fresh 52-week high, may rally more; brokerages raise target price, check key triggers
Shares of Zensar Technologies Ltd climbed 5 per cent in Monday's trade, to take its three day winning run to 17 per cent. Analysts are largely neutral-to-positive on the stock after the IT firm's Q4 results. The IT firm's cash at 22 per cent of market capitalisation and free cash flow (FCF) yield at 10 per cent support valuations, they said.
Motilal Oswal Securities said attractive valuation and strong earnings growth would drive the stock performance going ahead. Calling its performance an operation reset, HDFC Institutional Equities has increase its EPS estimates by 15 per cent on hopes of better operational trajectory for FY24/25E, even as it trimmed its revenue estimate by 2-3 per cent, factoring in challenges in hi-tech and consumer verticals.
The stock rose 5.24 per cent to hit a 52-week high of Rs 357.45 on BSE. ICICIdirect has a 12-month target of Rs 370 on the stock. Motilal Oswal Securities finds the stock worth Rs 390. HDFC Institutional Equities has a target of Rs 445 for the stock. Nuvama, meanwhile, has a lower target of Rs 340 on the stock.
Zensar Technologies offers application & IMS services to hi-tech, manufacturing, retail and BFS sectors. It is net debt free and as healthy double digit return ratio. ICICIdirect noted that the stock has seen 1.4 times jump in price over the past five years from Rs 240 level in May 2018.
The IT company has added four services lines in the recent one to one and a half years, which has increased the addressable market and subsequently revenue growth opportunities, it said.
Among key triggers for the stock going ahead would be moderation of subcontractor costs, which is expected to be one of the levers for margin expansion, it said.
The Zensar management expects challenges in consumer and hi-tech verticals going ahead and cited the uncertainty in the current demand environment with delay in decision-making.
HDFC Institutional Equities is expecting dollar revenue growth of 3.7 per cent for FY24 and 9.3 per cent for Fy25. It sees Ebitda margin of 14.3 per cent for FY24 and 14.7 per cent for FY25E. The domestic brokerager is factoring in revenue and EPS CAGRs of 7 per cent and 31 per cent, respectively, over FY23-25E.
The key question, after the positive surprise in March quarter results, is the sustainability of this performance – which is difficult to answer with conviction given a foggy macro-environment and management transition, said Nuvama Institutional Equities, which has maintained its 'Hold' rating on the stock post March quarter results.
Also Watch: Tata Motors shares at fresh 52-week high, may rally more; brokerages raise target price, check key triggers