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Multi Baggers

Hem Securities

5.30 AM Jan 1st 1970

Zensar Tech

BSE ID : 504067     NSE ID : ZENSARTECH

RECOMMENDED PRICE 623.00

PEAK FROM RECO 587.00 -5.78%

CURRENT PRICE 577.75 Resource id #18

Zensar Technologies is a leading India-based software and infrastructure services provider. We initiate a 'BUY' on the stock with a target price of Rs 780 with the medium to long term investment horizon.

Zensar Technologies

Zensar Technologies is a leading India-based software and infrastructure services provider. With over 6,800 associates, and a presence across the US, the UK, Europe, the Middle East, Africa, Singapore, China and Australia, the Company delivers comprehensive services for Mission-critical Applications, Enterprise Applications, Infrastructure Management, Business Intelligence and Analytics, Customer Relationship Management, Business Process Management and Digital Enterprise Services.

The company has registered decent results for the quarter ending December 2014. The revenues from operations grew by about 21 percent to Rs.720 crores vs. Rs.594 cr. in the year ago quarter while it grew ~10 percent q-o-q. Operating profit climbed sharply by 20.63 percent at Rs.105.51 crores as against Rs.87.26 crores in the previous year quarter. The adjusted net profit stood at Rs.69.52 crore for the quarter as against Rs.50.71 crore; registering a sharp growth of ~37 percent.Profitability has been negatively impacted by INR 10.2Cr due to customer furloughs. Not including Professional Access, Zensar has recorded QoQ revenue growth of 5 percent in INR terms and 4 percent in constant currency terms.

The Application Management services grew sharply by 29 percent at Rs.497.64 crores y-o-y. Products & Licences business revenues grew ~28 percent at Rs.89.10 crores from Rs.69.69 crores y-o-y while Infrastructure management business witnessed a fall y-o-y. US, Europe and Africa continue to be the key markets while India has clocked over 100 percent both quarter-on-quarter and year-on-year growth in INR terms.

Valuation

Strong growth across all the geographies, inorganic growth opportunities, large deal wins, continuing growth in Professional Access, improving utilization and focus on key areas of growth are the key growth drivers for Zensar Technologies Ltd. We believe the company is trading at an attractive valuation at 10.07x and 8.59x of FY15EPS of Rs.61.94 and FY16EPS of Rs.72.59. We initiate a 'BUY' on the stock with a target price of Rs.780 (appreciation of about 25 percent) with the medium to long term investment horizon.

For full details, Click on the attachment.

Disclosure of Interest Statement - Company Name

1. Analyst Ownership of the Stock - No
2. Hem & its Group Company Ownership of the Stock - Yes
3. Hem & its Group Companies' Director Ownership of the Stock - Yes
4. Broking relationship with company covered - No

Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advise. Reader is requested to rely on his own decision and may take independent professional advise before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned here in and the same have acted upon or used the information prior to, or immediately following the publication. Analyst Certification: The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

ZensarTech_HemSec_Multibagger.pdf

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