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ZENSARTECH - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | ZENSARTECH | Market Cap | 15,171 Cr. | Current Price | 667 ₹ | High / Low | 952 ₹ |
| Stock P/E | 23.3 | Book Value | 141 ₹ | Dividend Yield | 1.95 % | ROCE | 24.6 % |
| ROE | 20.2 % | Face Value | 2.00 ₹ | DMA 50 | 716 ₹ | DMA 200 | 751 ₹ |
| Chg in FII Hold | -1.50 % | Chg in DII Hold | 0.88 % | PAT Qtr | 181 Cr. | PAT Prev Qtr | 153 Cr. |
| RSI | 39.2 | MACD | -14.0 | Volume | 7,47,559 | Avg Vol 1Wk | 7,05,069 |
| Low price | 536 ₹ | High price | 952 ₹ | PEG Ratio | 1.02 | Debt to equity | 0.02 |
| 52w Index | 31.5 % | Qtr Profit Var | 18.0 % | EPS | 27.9 ₹ | Industry PE | 23.9 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT improved from 153 Cr. to 181 Cr. (+18%), showing healthy growth momentum.
- Margins & Returns: ROCE at 24.6% and ROE at 20.2% highlight strong efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.02 reflects negligible leverage, ensuring financial stability.
- Cash Flows: Dividend yield of 1.95% provides decent shareholder returns, supported by consistent cash generation.
💹 Valuation Indicators
- P/E Ratio: 23.3 vs industry average of 23.9 → trades in line with peers.
- P/B Ratio: Current Price / Book Value ≈ 4.73 → moderately above intrinsic value.
- PEG Ratio: 1.02 → indicates fair valuation relative to growth.
- Intrinsic Value: Current price (667 ₹) appears fairly valued given strong returns and growth potential.
🏢 Business Model & Competitive Advantage
- Operates in IT services and digital solutions with global client base.
- Strong efficiency ratios (ROCE, ROE) provide competitive edge.
- Low debt enhances resilience and supports expansion.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 640 ₹ – 670 ₹, near support levels.
- Long-Term Holding: Strong candidate for long-term portfolios focused on IT services; staggered accumulation recommended due to technical weakness.
✅ Positive
- Strong ROCE (24.6%) and ROE (20.2%) highlight efficiency.
- Quarterly PAT growth (+18%) shows robust momentum.
- DII holdings increased (+0.88%), reflecting domestic institutional confidence.
⚠️ Limitation
- P/B ratio (4.73) signals valuation above book value.
- Dividend yield of 1.95% is modest compared to some peers.
- Stock trading below both 50 DMA (716 ₹) and 200 DMA (751 ₹), indicating weak momentum.
📉 Company Negative News
- FII holdings decreased (-1.50%), showing reduced foreign investor confidence.
- RSI at 39.2 and negative MACD (-14.0) suggest bearish technical outlook.
📈 Company Positive News
- Quarterly PAT improved from 153 Cr. to 181 Cr.
- EPS of 27.9 ₹ supports valuation strength.
- DII holdings increased (+0.88%), supporting domestic confidence.
🏭 Industry
- Industry P/E at 23.9 indicates sector trades at similar multiples.
- IT services sector benefits from digital transformation and outsourcing demand.
- ZENSARTECH trades in line with industry, offering fair valuation with strong fundamentals.
🔎 Conclusion
ZENSARTECH demonstrates strong fundamentals with excellent efficiency, low debt, and consistent profit growth. Despite modest dividend yield and bearish technical signals, the company remains strategically positioned in IT services. Entry is advisable near 640 ₹ – 670 ₹ for long-term investors, with staggered accumulation to mitigate risks. Overall, ZENSARTECH offers a compelling long-term opportunity in the IT services sector.