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Motilal Oswal Report
While Zensar Technologies Ltd.'s revenue performance in FY21 (down 12% year-on-year in constant currency terms) was among the weakest in our IT Services coverage due to hit from both Covid-19 and restructuring in its top account (over 20% of revenue), it reported an impressive profit after tax growth (33% YoY), led by 6% Ebitda margin improvement.
The company's low valuation (13 times FY23E price-to-earning) is on account of its weak topline performance over the last two years.
With a new leadership (Ajay Bhutoria took over in January 2021), refreshed strategy, and reinvestment of margin gains in sales, we expect it to return to sustainable growth from H2 FY22.
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