Motilal Oswal is bullish on Zensar Technologies has recommended buy rating on the stock with a target price of Rs 260 in its research report dated January 22, 2019.
Motilal Oswal's research report on Zensar Technologies
Revenue grew 17% YoY (our estimate: +16% YoY) to USD143.7m, EBITDA increased 5% YoY (our estimate: +30% YoY) to INR1,104m, while PAT declined 2% YoY to INR565m (1.5% miss). CC revenue growth of 4.5% QoQ (+17.6% YoY) was above our estimate of 3.2%. Excluding revenues from the full-quarter integration of IndigoSlate, revenue growth stood at 2.3%, implying that the beat to our estimate came from 59% QoQ growth in the acquired entity. For 9MFY19, USD revenue/EBITDA/PAT grew 17%/30%/39.5% YoY.
Outlook
Towards that end, our target multiple of 14x now embeds the same, implying price target of INR260 (18% upside). We maintain our Buy rating and believe that the investment attractiveness will further enhance only on an improvement in the core profitability trend.
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