Kotak Securities recommended accumulate rating on Zensar Technologies with a target price of Rs 257 in its research report dated December 06, 2018.
Kotak Securities' research report on Zensar Technologies
We attended Zensar’s analyst meet where it highlighted the progress on its strategy and initiatives taken for future growth. Zensar emphasized its focus on Digital through its RoD Next platform. It outlined the digital spend across the verticals and why Zensar is well positioned to capture the opportunity. The company took a bold and aggressive decision about 2.5 years ago to become a 100% digital company before taking the platform to its customers. Company’s digital enterprise is built on 34 digital platform having 650+ releases with over 1.5mn downloads. The company is building an organization that focuses on sustained and profitable growth. 100% of $ 10mn+ deals won in last 2 years have RoD component built in them. RoD is the reason for the company to win new large deals and currently, 50 clients leverage RoD platform across US, UK and South Africa. The company did four acquisition in previous 2 years to bridge the competence and capability gap identified in 12 areas. Digital is shifting from Digital Build to Digital Scale. Digital Scale will be driving the next wave of spending and will have higher margins as the scale will be achieved through offshoring.
Outlook
The company has built ~30+ Digital platforms and filed for 25+ patents in FY18. The analyst meet reinforces our confidence in Zensar’s long term revenue and profile. We maintain ACCUMULATE with a target price of Rs.257.
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