This Ashish Dhawan-owned stock has zoomed 114% in four months

Zensar Technologies hits a new high of Rs 572.25, surging 17 per cent on the BSE in intra-day trades on Wednesday on the back heavy volume

Shares of Zensar Technologies hit a new high of Rs 572.25, surging 17 per cent on the BSE in the intra-day trades on Wednesday on the back of heavy volumes.

The stock of information technology (IT) consulting & software company has soared 31 per cent in past five trading days after the company, on September 9, 2021, announced that they have partnered with FRISS, the most widely adopted provider of AI-powered end-to-end fraud prevention and detection solutions for P&C insurers worldwide. This global, strategic partnership will enable Zensar’s clients to access the latest market-ready AI, a multitude of data sources and unparalleled customer service directly through FRISS.

In the past four months, the stock price of Zensar Technologies has zoomed 114 per cent from a level of Rs 268.65 on May 15, 2021. In comparison, the S&P BSE Sensex has rallied 20 per cent during the period. Meanwhile, in the past one year, the stock surged 200 per cent as against a 50 per cent gain in the benchmark index.

Investor Ashish Dhawan held 1.33 per cent stake in Zensar Technologies as on June 30, 2021, shareholding pattern data shows.

At 01:30 pm, the stock was trading 14.3 per cent higher at Rs 557.25, as against a 0.63 per cent rise in the S&P BSE Sensex. Trading volume at the counter jumped over five-fold with a combined 7.36 million equity shares, representing 3.26 per cent of total equity of Zensar Technologies, having changed hands on the NSE and BSE.

For April-June quarter (Q1FY22), Zensar delivered growth of 4.8 per cent quarter on quarter (QoQ) on constant currency (CC), the best organic growth in the past six years, supported by a recovery in the hi- tech vertical (+13 per cent QoQ CC) and strong BFS performance (+2.3 per cent QoQ CC).

The demand environment remains robust and Zensar - under the new leadership and revamped sales engine - is all set to accelerate organic growth. The inorganic route will be used to build capabilities in areas of advanced engineering and SaaS. The M3bi acquisition is a step towards enhancing data engineering, BI/analytics capabilities. The TCV wins stood at USD 96.7mn (book to bill at 0.8x), which include 50 per cent net-new wins. The deal trajectory is expected to improve with increased investments in sales and marketing and a greater focus on winning large deals. The management has maintained its guidance to deliver a high-teen EBITDA margin (~18-19 per cent), HDFC Securities said in Q1FY22 result update.

The company saw healthy growth in the Hi tech vertical led by new logos, healthy demand and ramp up in existing customers. Zensar has aligned its services with client spend, which is helping drive growth. The company has also hired leadership to drive growth in the segment, ICICI Securities said.

The new CEO’s strategy to focus on digital app, advance engineering, digital engineering, experience and digital foundation services is seeing traction. The CEO is also focusing sales expansion, partnership, reskilling and M&A which is expected to drive long term revenues. This strategy is expected to drive long term sustainable growth. The CEO expects the strategy to fully materialise in the next seven quarters (green shoots are visible in the current quarter), the brokerage firm said post result update.

However, the stock is currently trading above the brokerage's target price of Rs 505 per share.