Zensar Technologies Q3 Review - Topline Growth Recovery Needed For Stock Re-Rating: Motilal Oswal
Attendees working on laptop computers in New York, U.S. (Photographer Victor J. Blue/Bloomberg)

Zensar Technologies Q3 Review - Topline Growth Recovery Needed For Stock Re-Rating: Motilal Oswal

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Zensar Technologies Ltd.’s Q3 FY21 revenue performance (decline of 3.7% QoQ constant currency) – impacted by restructuring at its top client – was below our already muted expectation.

With the company guiding for a weak Q4 on continued drag from the top client, we expect double-digit decline (down 12.1% YoY) for FY21E.

On the other hand, the Q3 Ebit margin (15.9%) was ahead of our expectation as it continued to benefit from the offshore revenue shift (up 300 basis point QoQ; up 910 basis point YoY).

We expect the company to reinvest some of the gains from aggressive cost rationalization into growth and expect an Ebit margin of 14.8% in FY22E.

Click on the attachment to read the full report:

Motilal Oswal Zensar Technologies Q3FY21 Result Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.