ICICI Direct's research report on Zensar Technologies
We attended the virtual analyst meet of Zensar Technologies. The key highlights of the meet were it will take four to eight quarters for a complete turnaround of the company. To achieve this, Zensar is addressing key shortages of past. In addition, the new CEO has devised a strategy to focus on experience side and build capabilities in digital engineering, data, artificial intelligence and machine learning. These technologies require 5x investment compared to the investment in experience. Further, Zensar is expanding sales capability (in pre-sales hunter, farmers) and hiring leaders to drive growth. The company is also focusing on increasing deal velocity and annuity revenues to counter deal ramp downs. In addition, Zensar plans to drive growth via tuck in acquisition. We believe all these initiatives bode well for long term growth and prompt us to be positive on the stock.
Outlook
In addition, healthy margins prompt us to be positive on the stock. Hence, we maintain BUY rating on the stock with a revised target price of Rs 345 (15x PE on FY23E EPS, earlier target price Rs 315)..
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