ZENSARTECH - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.6

📊 Fundamental Analysis of Zensar Technologies Ltd (ZENSARTECH)

✅ Strengths

Solid Financial Health

Debt-to-Equity: 0.03 — virtually debt-free, strong balance sheet

ROCE: 21.3%, ROE: 16.4% — respectable capital efficiency, though not exceptional

Consistent Profitability

PAT Qtr: ₹182 Cr vs ₹176 Cr — steady growth

Qtr Profit Var: +15.3% — positive earnings momentum

Reasonable Valuation

P/E: 27.2 vs Industry PE: 29.1 — slightly undervalued

EPS: ₹29.7 — decent earnings base

Dividend Yield: 1.61% — modest income generation

Technical Support

Trading near DMA 200 (₹769) — long-term support zone

Price up 60.7% YoY — strong relative performance

⚠️ Concerns

PEG Ratio: 1.81 — indicates overvaluation relative to growth

ROE below 18% — not ideal for high-growth compounding

MACD: -7.69, RSI: 43.9 — weak momentum, neutral zone

FII Hold ↓ 0.42% — foreign investors trimming exposure

Volume Drop — current volume significantly below weekly average

📉 Ideal Entry Price Zone

Entry Zone: ₹750–₹780

Near DMA 200 and technical support

Offers better risk-reward if PEG compresses and growth accelerates

🧭 Long-Term Investment Outlook

Zensar Technologies is a moderate long-term candidate, best suited for investors seeking stable IT exposure with modest growth and income. It lacks the high-growth metrics of niche tech players but offers consistency and low volatility.

Holding Period: 2–4 years

Reassess if ROE drops below 14% or PEG remains above 2.0

Watch for margin expansion, digital transformation wins, and client diversification

🚪 Exit Strategy (If Already Holding)

Partial Exit Zone: ₹850–₹880

Near recent resistance and psychological barrier

Full Exit

If PEG ratio stays elevated without earnings acceleration

If price breaks below ₹740 with weak volume and RSI < 35

If ROE stagnates below 14% for 2+ quarters

Reinvest: Only if PEG compresses below 1.2 and ROE improves above 18%

Would you like a side-by-side comparison with peers like Mphasis, L&T Technology Services, or Persistent Systems to evaluate relative growth and valuation?

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