Zensar technologies

Dear Santosh

Could please share the excel file ? . Thanks.

You can download the same from above link.

Nice analysis on future potential, just curious how you are sure about downside protection for Zensar as compared to other IT companies? Thanks

Zensar is available at nominal growth of 3% in cash flow. Most of IT companies market cap factors double digit growths. Its not to say that they are not safer bet than zensar. Its just that we need to dig deeper and predict the future with more certainty.

Hi guys,
Is anybody tracking this stock?
It is a low growth it company but the valuations look decent.
Has dividend yeild of 2.2% and close to 700cr cash on books(as per screener).

If anybody is tracing this stock would request you to please throw some light and your view on it.

Sales are growing and last quarter margins were 9%. Does this look like the bottom?

It is the cheapest stock currently among IT mid/small caps interms of valuation. Fundamentally I see nothing wrong in this business except for some margin drops for a few quarters, which should not matter to an investor with even a 3year horizon. It should grow decently and margins will normalise by end 2023/2024 same as all IT stocks as TCS’s Gopinathan predicts.

3 Likes

Recent developments include Mr Ajay Bhutoria resigning due to personal reasons and Anant goenka taking the spot in the interim. Both moves dont give much confidence. Mr Bhutoria has had health issues for some time so I don’t see this as a rats fleeing the ship scenario though. Mr goenka seems like a left field decision which ignored all of the current executives.

Currently the company is available at just 4.5k or so mcap and all negatives including ceo leaving + margin compression look priced in. Dividend at 2.5 percent looks intriguing but in reality this will drop by a huge amount due to lower profits too. Now the unknowns are

  1. Who will the new ceo be come July and what will his vision be.
  2. They’ve shot themselves in the foot regards HR. They need to reverse this soon. While other IT companies have been hit too… zensar has been hit a lot harder.
  3. Will revenue continue increasing at current 12 percent rate or will it slow down with management change and with the global slowdown

All things considered while there looks to be an MOS forming here I’m still not fully convinced. Results are on the 23rd of January and il be keeping a careful watch then for any green shoots/updates regards management changes. Could still be a few more quarters of pain here but the valuations are very very intriguing

Disc: Not invested yet.

3 Likes

I think new CEO will be manish Tandon because recently he is recruited as managing director before the resignation of Ajay. And he has experience as CEO of css corp. So i think unless they offer CEO position he won’t join in the firm. I think they have to just announce publically.

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Zensar has recently been facing some challenges, as reflected in their last few quarterly results. Despite being valued lower, the company has seen poor growth in terms of revenue and a decline in margins. Their expenses grew far faster than their topline. During the earnings call, the CEO appeared to struggle in answering some of the questions and was not able to provide a clear picture of the situation. This has raised concerns among investors about the future prospects of the company. It remains to be seen whether Zensar will be able to turn things around and improve its performance in the upcoming quarters.

Finally company publically announced new CEO i.e today 23rd jan 2023