Buy Zensar Tech; target Rs 1,000; expect gradual recovery on margin front: Prabhudas Lilladher

The company's valuations remain reasonable and there is a room for re-rating over two-year period.

Shares of Zensar Technologies rose 3 percent intraday Tuesday as broking house Prabhudas Lilladher has initiated buy rating with price target of Rs 1,000, with a potential upside of 13.6 percent.

The broking firm believes that increasing proportion of revenues from Digital SBU coupled with deal wins is going to revive revenue growth trajectory of the company and also expect gradual recovery on the margin front.

The revival in growth to drive SG&A leverage and margin expansion over the financial years through March 2020.

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It believes that the strong expertise in Oracle offerings remains the key proposition.

The company is now positioned to address complete value chain in Retail eCommerce, it added.

EPS estimates for the current and next two financial years are Rs 52, Rs 65 and Rs 80 respectively and dollar Revenue growth for the current and next two financial years estimated at 3.7 percent, 10.3 percent and 11 percent respectively.

According to the firm, the company's valuations remain reasonable and there is a room for re-rating over two-year period.

At 10:53 hrs Zensar Technologies was quoting at Rs 888.50, up Rs 14.75, or 1.69 percent on the BSE.

The share touched its 52-week high Rs 954.50 and 52-week low Rs 735.50 on 15 February, 2017 and 12 October, 2017, respectively.

Currently, it is trading 6.91 percent below its 52-week high and 20.8 percent above its 52-week low.