vishnuvega
06-12-2007, 07:38 AM
IL&FS Investsmart has recommended buy rating on Zensar Technologies with a target of Rs 297 as per their report on November 29, 2007. “Zensar Technologies (ZTL’s) strong order pipeline in Oracle and SAP-based implementations is expected to drive growth in Enterprise Application Services (EAS). ZTL is expected to witness 7%-8% increase in blended pricing during FY08E-10E. This would also contribute to expand ZTL’s EBIDTA margins from 11.7% in FY08E to 13% in FY10E. As on September 30, 2007, ZTL had a total order book of $140mn to be executed in the next 12 months; of this, orders of USD 60 milion were sourced from its large client, Cisco. This gives strong revenue visibility in the near future. Currently at Rs 168, the stock is trading at PER of 5.8x on FY08E EPS of Rs 29.2 and at PER of 4x on FY09E EPS of Rs 42.4, which is at a substantial discount to peers. Hence we initiate coverage on ZTL with a ‘BUY’ rating and a price target of Rs 297 (77% upside). According to the IL&FS Investsmart research report