Buy Zensar Technologies



Zensar Technologies acquired Akibia Inc last month. The results of Akibia group will be reflected in the march quarter of Zensar.

On consolidated basis the company is expected do a Profit After Tax of around 130 crores on the topline of around 1150 crores, resulting into an EPS of around Rs 30.

The midcap IT story has started to catch up recently and there has been an overall PE rerating happening across the midcap IT basket. We expect that even on conservative basis Zensar should get a PE multiple of at least 8 times in 3 months from here. Considering that our price target for the stock is Rs 240/- in 3 to 4 months time frame.

Investors with that kind of time frame in mind can invest in the company at around Rs 170/- for an appreciation of close to 40%.



2 comments:

Priyanka said...

Hey Amit,

At CMP of 150/- do you still recommend to buy this scrip. If yes what would be the target and time frame.

Thanks,
Priyanka

Amit Agarwal said...

The stock hasen't performed well in last month or so, It was basically due to fact that all IT companies had massive wage hikes in Apr-Jun Quarter and end of STPI benefit which had put pressure on the net income. I feel at this point of time one should wait for a month or so and dabble into it at the level of 130 to 140 range. At such price the stock would be attractively valued at around 5 times FY12 EPS and should give descent return from those levels.

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