Mehabe score: 5 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Zensar Technologies is a leading digital solutions and technology services company. It is a part of the Mumbai-based RPG group and is headquartered in Pune, India. It operates in two segments: Application Management Service and Infrastructure management service. It is focused on industry verticals, such as Hitech & manufacturing, consumer services, and banking, financial services, and insurance. They have offices located in India, the USA, UK, Europe, and Africa.
Main Points
Business segments
Application management services (84% of total revenue in FY20): It includes Application development, Maintenance, Support, Modernization, and Testing services across a wide technology spectrum and industry verticals.
It includes hybrid IT, Digital workspace, Dynamic security, and unified IT provided under managed service platform using automation, autonomics, and machine learning.Site:ZENSARTECHMain Symbol:ZENSARTECH
Stock trades at 388.0, above its 50dma 318.28. It also trades above its 200dma 263.82. The stock remains bullish on techicals
The 52 week high is at 391.15 and the 52week low is at 139.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 23.71%
Weakness
– The company has delivered a poor sales growth of 5.08% over past five years.
Competition
– The industry trades at a mean P/E of 35.1x. Happiest Minds trades at the industry’s max P/E of 122.46x. ZENSARTECH trades at a P/E of 26.2x
– Industry’s mean G-Factor is 3.8 while the mean Piotski score is 9.0. ZENSARTECH has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 22.3%. The max 1- month return was given by Happiest Minds: a return of 43.43 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 937.0 cr compared to Rs 991.0 cr for period ended Jun 2020, a fall of 5.4%
Operating Profits reported at Rs 173.0 cr for period ended Jun 2021 vis-vis 143.0 for period ended Jun 2020 .
Operating Margins expanded 403.3 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 4.48 compared to Rs 3.91 for previous quarter ended Mar 2021 and Rs 3.25 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3727.0 cr for period ended TTM vis-vis sales of Rs 3781.0 cr for the period ended Mar 2021, a fall of 1.4%. The 3 year sales cagr stood at -2.1%.
Operating margins expanded to 19.0% for period ended TTM vis-vis 18.0% for period ended Mar 2021, expansion of 100.0 bps.
Net Profit reported at Rs 328.0 cr for period ended TTM vis-vis sales of Rs 300.0 cr for the period ended Mar 2021, rising 8.5%.
Company recorded a Net Profit CAGR of 1.5% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 858.0 cr for period ended Mar 2021 vis-vis Rs 686.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 15.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 169% on a 1 Year basis vis-vis a return of 17% over the last 3 Years. – The compounded sales growth on a TTM bassis is -10% vis-vis a compounded sales growth of 7% over the last 3 Years. – The compounded profit growth on a TTM basis is 32% vis-vis a compounded profit growth of 11% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 17.1% vis-vis 16.02% for Mar 2021 – Public shareholding has risen for the period ended Jun 2021. The Jun 2021 public holding stood at 12.59% vis-vis 10.22% for Mar 2021
Conclusion
– has been maintaining a healthy dividend payout of 23.71% – The company has delivered a poor sales growth of 5.08% over past five years.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 318.28 and is trading at 388.0, thus bullish price action wise.
