A Dark Horse of IT Sector – Zensar Technologies

A closer view on Zensar Technologies proves it as a dark horse of the IT sector. The Company over which we gave “Buy” recommendation on 7th February 2011 has given a substantial return in last 14 months. If looked closely at the stock price of the company on 7th February 2011 it was Rs. 156.95 (Closing Price) which translates to return of whopping 43.77% compared to yesterday close of Rs. 225.65. In the same time our benchmark index nifty gave a return of -1.18%. Some stocks perform silently, moves silently and give returns silently.

Zensar Technologies is a software wing of RPG group and offers end-to-end services from IT development to Business Process Outsourcing, from consulting to implementation. The company is recognized by the Department of Scientific and Industrial Research (DSIR) for its robust in-house R&D practices and an acknowledged leader in innovation.It carries its operations across twenty countries in the world including US, UK, Germany, Sweden, Finland, Middle East, South Africa, Singapore, Australia, Japan and Poland with 6000+ associates and 400+ customers.

Zensar Technologies is world’s first enterprise-wide SEI CMM Level 5 Company and now a CMMI Level 5 Company with industry expertise across Retail and Distribution, Banking, Financial Services and Insurance, Healthcare and Life Sciences, Manufacturing, Energy and utilities. Its customer base includes Cisco, National Grid, Fujitsu, Marks and Spencer, Danaher Corporation, Electronic Arts and Logitech among others.

In December, Company signed an agreement with technology giant Google to provide Google Apps solution to large retail and manufacturing customers.

The promoters of the company have been continuously increasing their stake. In last 9 months the stake of the promoters increased from 47.82% in June-11 to 48.05% in Mar-11. On the dividend front company declared a dividend of Rs 6.5 for FY-12 which translates to yield of 3.6% which is really good for a mid-cap IT company. On the financial front the top line and bottom line showed a growth of 16% and 21% respectively which is worth appreciating citing global crisis we are into since 2009.

Last year when I had a talk with the management they were quite sure of going for 30% CAGR for next three years in both top line and bottom line. Today in 9M FY12 they put a total of Rs 545 Cr in the top line and 74 Cr in the bottom line. If last quarter to be projected we expect them to post top line of 800 Cr in FY 12 and the bottom line to be between 90-100 Cr. This makes an increase of 30% in top line and around 22% in the bottom line near to the company’s target.

When whole world is going through a stressful situation where to invest and how much to expect? Where the PM’s own economic advisor gives a statement of no reforms till 2014 there volatility in the market is a natural phenomenon. To counter the volatility of the macro world you require certain stocks that can give a good return with limited downside. One such stock is Zensar Technologies.

If you are interested in knowing many more companies like Zensar or want to subscribe to our different “Investment” packages contact me at niraj@hbjcapital or go to this link Multibagger Penny Stocks

Niraj Rampuria, Market Learner [niraj@hbjcapital.com]
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