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ZENSARTECH: The multi bagger, Fundamental and Technical Analysis

Long
NSE:ZENSARTECH   ZENSAR TECHNOLOGIE
ZENSAR is an IT company that consists of multi-stream businesses. It operates two major segments one is application management and the other is infrastructure management services.

Overview-

Revenue Split:
Major revenue comes from USA 70%, Europe 16% and 11.2% South Africa. Their clients are from the USA, UK & EU, Africa.

Revenue in Q4 FY21 clocks at 494m with
EBITA ( earnings before interest,tax and amortisation) is18.7m
PAT (profit before tax) is 9m

ZENSAR top clients 20 out of 35 serve 63.8% of their revenue.

Service Area:
Banking and financial services
HI-TECH Manufacturing
Insurance
Retail and Consumer Services

These are basic things...

Recently company acquires M3bi LLC who's revenue is 26.7m. They acquire it because they want to Strengthen the capabilities in Data Engineering & Analytics and Advanced Engineering Services

Quantitative:
IRR is 122% in the period of 2017-2020
IRR has been decreased and affected due to covid 19 in the year 2020
Net profit is increased by 14% from 263Cr to 300Cr
Sales have been decreased by 9.60%

Important factors:
1. Company debt to equity is 0.15 very less positive.
2. ROE is 15.1% in the stage of lowest market capitalization in the IT Sector
3. Price to book value is 2.91 lowest among top 25 companies of the IT Sector
4. P/E ratio is double surpassing in the Sector only 2 companies have P/E ratio of 20.4 while their peers have very high P/E which leads to high premium.
5. Reserves has been increased fairly
6. Form last 2 days DII's Including DSP M.F and Nippon M.F invested heavily.


Technicals:
1. Price is in the trending phase with no distributions and accumulation zones
2. Price is consolidation in the structure of Cup & Handle on the verge of their all-time high
3. Relative strength on 1D & 1 Week is nearly at 1-2 with a positive range
4. Below Critical demand zone it'll severe to your investment
5. Short-term target is 12.08% long term is with 38%
4. For the long term It depends upon their subsidiaries either it'll become multi-bagger or not.


Conclusion:
The stock has a very high potential of gaining 150%-to 200% according to an IRR of 122% between 2017 to 2020. Since June 2020 growth has been affected

I haven't given views on the qualitative side as everyone has their personal views on at what level management holds their skills to drive the company to its higher potential.

That's it!

Let me know in the comment section what's your views on this?

Comments

Thanks for the detailed view,
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