ICICI Direct, HDFC, and Motilt Oswal are the biggest brokerage firms in India, all three brokerages have given buy calls on this stock, but with a varying target price.
ICICI Direct has given a buy call on Zensar Tech with a target price of Rs 525, which is an upside potential of 26% from the current market price. HDFC Securities has also given a buy call on Zensar Tech, but with a target price of Rs 600, which is an upside potential of 44%. Motilal Oswal has also given a buy call on Zensar Tech with a target price of Rs 580, which is an upside potential of 39%.
|Brokerage||Target Price||Upside Potential|
|ICICI Direct||Rs 525||26%|
|Motilal Oswal||Rs 580||39%|
|HDFC Securities||Rs 600||44%|
Q3 FY22 results
In Q3FY22, the company reported revenue of $147.1 Mn, a quarterly YoY growth of 19.8%. PAT stood at $12.2Mn or 8.2% of revenues, a quarterly YoY decline of 270 bps. The company reported net cash of $168Mn in Q3FY22.
On a quarterly YoY basis, the US region reported growth of 20.8%, the Europe region reported growth of 23.7%, and the South Africa region reported growth of 8.3%.
From a vertical perspective, the banking vertical posted a quarterly YoY growth of 76.5%, while the insurance vertical posted a quarterly YoY growth of 8.9%. The consumer services vertical posted a quarterly YoY growth of 26%, and the Hi-Tech and manufacturing vertical reported a quarterly YoY growth of 7.1%.
Revenue by segment
Revenue by geography
Key triggers for future price perfromance as per the brokerages
Zensar is addressing key shortages of the past, the new CEO has devised a strategy to focus on the experience side and build capabilities in digital engineering, data, artificial intelligence, and machine learning.
Driving deal momentum, annuity revenues, increasing investment in sales & talent, leadership, and tuck in acquisition to build capability bodes well for long-term revenue growth. Expects dollar revenue CAGR of 12.3 over FY21-24E.
Oppotunities for Zensar Tech in next generation services
Zensar tech has a big opportunity in next-generation services to bring business value like:
- Advanced AI to accelerate the adoption of metaverse in larget enterprise: Zensar tech research and innovation center, Zenlabs worked with a client on automatic application of granular physical properties on metaverse objects, to give them a relistic tuch. This work involves deep learning models to render relistic 3D imaging which can be easily consumed by any XR enviroment.
- Machine leadning.
- Digital product engineering transformation on cloud scale.