Zensar Technologies.
As was the case last year, Zensar has introduced an offering for its customers, which assures a 10% savings in cost over a 10-month time frame by improving the processes of the customer company.
Zensar is merging its wholly - owned subsidiaries Zensar ThoughtDigital LLC and Zensar OBT Technologies Inc with Zensar Technologies Inc.
Challenges have emerged in the enterprise applications business with both, SAP and Oracle related implementations facing a slowdown.
Future prospects.
We expect Zensar to achieve revenues of Rs.9.49bn in FY09 and Rs.9.5bn in FY10. While volumes are expected to rise by about 6%, expected billing rate pressures and rupee appreciation are expected to impact revenue growth. EBIDTA margins are expected to be almost flat as gains from higher off-shore content and better resource utilization should set off the impact due to salary increases and expected rupee appreciation. Higher revenues from value added services are also expected to restrict the impact on margins. Consequently, PAT is expected to be almost flat in FY10 at Rs.840mn; an EPS of Rs.35.1. Based on DCF analysis, the fair price target works to Rs.154 for the stock.
As was the case last year, Zensar has introduced an offering for its customers, which assures a 10% savings in cost over a 10-month time frame by improving the processes of the customer company.
Zensar is merging its wholly - owned subsidiaries Zensar ThoughtDigital LLC and Zensar OBT Technologies Inc with Zensar Technologies Inc.
Challenges have emerged in the enterprise applications business with both, SAP and Oracle related implementations facing a slowdown.
Future prospects.
We expect Zensar to achieve revenues of Rs.9.49bn in FY09 and Rs.9.5bn in FY10. While volumes are expected to rise by about 6%, expected billing rate pressures and rupee appreciation are expected to impact revenue growth. EBIDTA margins are expected to be almost flat as gains from higher off-shore content and better resource utilization should set off the impact due to salary increases and expected rupee appreciation. Higher revenues from value added services are also expected to restrict the impact on margins. Consequently, PAT is expected to be almost flat in FY10 at Rs.840mn; an EPS of Rs.35.1. Based on DCF analysis, the fair price target works to Rs.154 for the stock.
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