Multi Baggers
Zensar Tech
BSE ID : 504067 NSE ID : ZENSARTECH
RECOMMENDED PRICE 285.90
PEAK FROM RECO 587.00 105.32%
CURRENT PRICE 575.20 Resource id #18
Zensar Technologies is among the top 13 technology and software services providers from India. We initiate a 'BUY' on the stock with a target price of Rs 380 with the medium to long term investment horizon.
Zensar Technologies Ltd
Zensar Technologies is among the top 13 technology and software services providers from India, and is seen today as a valuable change partner for enterprises to drive transformation by providing innovative technology solutions.
The company has posted excellent quarterly performance for the quarter ending September 2013. The revenues from operations on jumped by around 10 percent at Rs.599.74 crores vs Rs.545.05 crores y-o-y. Operating profit climbed sharply at about Rs.102.54 crores as against Rs.81.05 crores in the previous year quarter. The company has crossed 100 crores of operating profit for the first time in the history. The net profit skyrocketed at Rs.70.63 crore for the quarter as compared to Rs.32.17 crore. EPS for the quarter stood at Rs.16.17. Operating profit margin stood at 17.10 percent witnessing an expansion of 223 bps y-o-y. Net profit margin stood at 11.78 percent; expanding 588bps y-o-y. The company has incurred 19 crores of capex for the first half year of FY14.
Revenues from Application management services grew by 14 percent at Rs 403.82 cr. vs Rs 354.09 cr. Revenues from Infrastructure management services grew sharply by 17 percent at Rs. 135.88 cr. as against Rs.116.17 cr. Product & Licenses revenues de-grew by 25 percent at Rs.50 cr. from Rs.67 cr. The company has signed 12 significant deals in this quarter.
A sharp growth of 30.47 percent was witnessed from manufacturing vertical at Rs.371.55 cr.; BFSI grew by 4.5 percent at Rs.117.95 cr. On the geographical mix. US grew 8.31 percent at Rs.442.33 cr.; Europe grew sharply by 23.48 percent; Africa grew by 21.95 percent and ROW fell 5.91 percent.
Valuation
With robust order pipeline, expanding service offerings, geographical expansion, growth via inorganic route and focus on large ticket deal wins; Zensar Technologies Ltd. revenue stream looks visible. We believe the company is trading at an attractive valuation at 6.07x and 5.13x of FY14EPS of Rs.47.05 and FY15EPS of Rs.55.68. We initiate a 'BUY' on the stock with a target price of Rs 380 (appreciation of about 33 percent) with the medium to long term investment horizon.
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HemSec_ZensarTech_Multibagger.pdf
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