Zensar Technologies shares hit 52-week high on Q1 earnings show

Shares of Zensar Technologies Ltd hit a fresh 52-week high today after the IT firm reported a 31% rise in consolidated profit for the quarter ended June 2023.  On a year-on year basis, the IT firm reported a 108% rise in profit.  

Zensar Technologies stock zoomed 7% to Rs 493.35 against the previous close of Rs 461.20 on BSE. Market cap of the firm climbed to Rs 37,887 crore.    

With today's rally, Zensar Technologies stock has risen 128% this year. In a year, the stock has delivered returns of 87.50%. Total 3.89 lakh shares changed hands amounting to a turnover of Rs 18.48 crore on BSE. Zensar Technologies stock hit a 52-week low of Rs 202 on December 23, 2023.    

In terms of technicals, the relative strength index (RSI) of Zensar Technologies stands at 80.5, signaling it's trading in the overbought territory. Zensar Technologies stock has a one-year beta of 1, indicating high volatility during the period. Zensar Technologies shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.    

 Net profit rose to Rs 156.2 crore for the June 2023 quarter against Rs 119.2 crore profit  in the March 2023 quarter. On a year-on year basis, the IT firm’s profit climbed 108% from Rs 75.1 crore in the June 2022 quarter. 

Revenue in the June 2023 quarter climbed to Rs 1227.2 crore against Rs 1212.6 crore in the March quarter of 2023. Earnings per share (EPS) rose to Rs  6.90 in Q1 against Rs 5.27 in the March 2023 quarter.    

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose 30% to Rs 210.20 crore in the June quarter against Rs 161.60 in the March 2023 quarter. On a year-on-year basis, EBITDA zoomed 106.08% from Rs 102 crore in the June 2022 quarter. 

Operating profit zoomed 31% to Rs 230.10 crore in Q1 against Rs 175.80 crore profit in the March 2023 quarter. Operating profit rose 106% from Rs 136.10 crore in the June 2022 quarter. 

HDFC Securities has maintained its buy rating on the IT scrip. 

 “We expect USD revenue growth of 2.2/10/12% and an EBITDAM of 17.4/17.2/17.5% for FY24/25/26E respectively, resulting in revenue/EPS CAGRs of plus 8/30% over FY23-26E. RoE of 18% and free cash flow yield at 5% support the valuation. We maintain our BUY rating with a target price of Rs 520, based on 18x June[1]25E EPS. The stock is trading at a P/E of 18.1/16.7x FY24/25E EPS, in line with the five-year average P/E multiple,” said the brokerage.  

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