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IDBI Capital Report
Zensar Technologies Ltd.’s reported subdued profitability in Q1 FY23 mainly led by higher sub-contracting cost, supply side issue and onsite shift.
Going forward, we expect the company’s overall revenue growth to be impacted by macro related challenges and decline in discretionary spend in hi tech, manufacturing and consumer services.
In addition, we expect Zensar Tech’s margins to be impacted by wage hikes and slowdown in revenue growth. The company has also pushed the target of achieving mid-teens margins by two quarters to Q2 FY24E.
However, we believe this can be further delayed. Hence, we have lowered our earnings per share estimates downwards by 30.6% in FY23E and 21.6% in FY24E.
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