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IDBI Capital Report
Zensar Technologies Ltd. Q4 revenue grew 2.0% QoQ in constant currency terms due to reversal of furloughs. Going forward the company expects revenues to improve on QoQ basis led by broad based growth in verticals and improving deal wins trajectory (up 22% YoY to $ 698 million in FY24, book to bill of 1.2 times).
This coupled with company's intention to invest in capability building, sales and large deals, we expect 5.5% YoY and 13% YoY growth for FY25E and FY26E.
In addition, considering FY24 performance we have revised margin estimates for FY25E upwards by 34 bps and FY26E earning per share upwards by 32 bps leading to maintenance EPS estimates despite lowering of revenue estimates.
We maintain our 'Hold' rating on the stock with a target price of Rs 615 (18 times FY26E EPS).
We believe key trigger for further rerating will be sustaining growth for next few quarters.
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