Investment Idea - Zensar Technologies - Risk Reward Attractive: Motilal Oswal
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Motilal Oswal Report
Zensar Technologies Ltd., part of RPG Group, is a leading digital solution (64% of revenue) and technology service provider.
While the company's revenue performance in FY21 (down 12% YoY in constant currency terms) was among the weakest in our IT Services coverage due to hit from both Covid-19 and restructuring in its top account (over 20% of revenue), it reported an impressive profit after tax growth (33% YoY), led by 6% Ebitda margin improvement.
Its topline performance has been weak over the last two years.
However, with a new leadership (Mr. Ajay Bhutoria took over in January 2021), refreshed strategy, and reinvestment of margin gains in sales, we expect it to return to sustainable growth from H2 FY22.
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