ZENSARTECH - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | ZENSARTECH | Market Cap | 11,127 Cr. | Current Price | 489 ₹ | High / Low | 895 ₹ |
| Stock P/E | 15.8 | Book Value | 155 ₹ | Dividend Yield | 2.66 % | ROCE | 26.5 % |
| ROE | 21.3 % | Face Value | 2.00 ₹ | DMA 50 | 541 ₹ | DMA 200 | 645 ₹ |
| Chg in FII Hold | -1.29 % | Chg in DII Hold | 0.54 % | PAT Qtr | 199 Cr. | PAT Prev Qtr | 181 Cr. |
| RSI | 35.4 | MACD | -17.4 | Volume | 2,00,941 | Avg Vol 1Wk | 3,51,618 |
| Low price | 470 ₹ | High price | 895 ₹ | PEG Ratio | 0.47 | Debt to equity | 0.01 |
| 52w Index | 4.39 % | Qtr Profit Var | 35.6 % | EPS | 30.2 ₹ | Industry PE | 20.7 |
📊 Core Financials:
ZENSARTECH has delivered solid financials with quarterly PAT rising from 181 Cr. to 199 Cr. (↑35.6%). ROCE at 26.5% and ROE at 21.3% are strong, reflecting efficient capital utilization. Debt-to-equity is very low at 0.01, indicating a robust balance sheet. EPS stands at 30.2 ₹, supported by consistent profitability and strong cash flows.
💹 Valuation Indicators:
The stock trades at a P/E of 15.8, below the industry average of 20.7, suggesting undervaluation. P/B ratio is ~3.15 (Price 489 ₹ / Book Value 155 ₹), which is moderate. PEG ratio of 0.47 indicates growth is attractively priced. Intrinsic value appears higher than current levels, offering margin of safety.
🏢 Business Model & Competitive Advantage:
ZENSARTECH operates in IT services and digital solutions, with strong brand presence and global client base. Its competitive advantage lies in scale, innovation, and efficient operations. High ROCE and ROE highlight superior capital efficiency, though institutional confidence has weakened slightly with reduced FII holdings.
🎯 Entry Zone & Long-Term Guidance:
Current price (489 ₹) is below both 50 DMA (541 ₹) and 200 DMA (645 ₹), showing bearish momentum. RSI at 35.4 indicates oversold conditions, while MACD (-17.4) confirms negative momentum. A good entry zone would be 470–490 ₹ if undervaluation persists. Long-term holding is favorable given strong fundamentals, undervaluation, and attractive dividend yield (2.66%).
Positive
- 📈 Quarterly PAT growth (↑35.6%).
- 💰 Strong ROCE (26.5%) and ROE (21.3%).
- 📊 Attractive P/E (15.8) vs industry average (20.7).
- 🌍 Dividend yield at 2.66% provides shareholder returns.
Limitation
- ⚠️ EPS modest at 30.2 ₹ relative to market cap.
- 📉 FII holdings reduced (-1.29%).
- 📉 Price below 200 DMA, weak long-term momentum.
- 📉 Industry competition remains high, limiting margin expansion.
Company Negative News
📰 No major negative news reported recently, but reduced FII holdings and bearish technical signals raise caution.
Company Positive News
📰 Quarterly earnings improved with PAT rising to 199 Cr. Dividend yield remains attractive at 2.66%, and fundamentals highlight strong capital efficiency.
Industry
🏭 Industry P/E stands at 20.7, higher than ZENSARTECH’s valuation. The IT services sector remains resilient, driven by digital transformation, cloud adoption, and consulting demand.
Conclusion
✅ ZENSARTECH is financially strong with efficient capital utilization, attractive dividend yield, and undervaluation compared to industry peers. Best suited for long-term investors who can accumulate near 470–490 ₹. Short-term traders should remain cautious due to weak technical momentum despite strong fundamentals.
Would you like me to extend this into a peer comparison to evaluate how ZENSARTECH stacks up against Infosys, TCS, and Wipro?