Target: ₹1,130

CMP: ₹841.35

We believe Zensar is a new turnaround story unfolding at the RPG group led by its new leadership team. This is evident from strategic changes undertaken like: CEO Manish Tandon leading Zensar’s story to bring in stability and agility; large deal wins fueled by incentivizing sales team structure; and client centricity reflected in improved customer experience scores.

The new initiatives are getting reflected in the company’s industry-low attrition rates, better customer experience scores and improving profitability, which has witnessed 40 per cent CAGR from FY23-25.

Zensar’s focused services clubbed together as one value proposition has witnessed growth of 8.2 per cent y-o-y v/s overall top-line growth of 5.4 per cent y-o-y in FY25. These services are resonating well with large clients, meeting their customised needs in one go.

Stable TCV wins with an impressive industry-leading revenue conversion rate of 90 per cent, builds confidence in the future executional capabilities of Zensar. Moreover, it has witnessed 35 per cent CAGR in cash equivalents from FY19-25, with zero debt on books & Mcap/OCF ratio of 30x, which retains investment comfort.

Given its strategic long-term growth plan, we expect Zensar to deliver Revenue/ EBITDA/ PAT CAGR of 9.8/10.4/15.4 per cent from FY25-FY27E on an organic basis. Thus, we initiate coverage on Zensar with a Buy recommendation and Target Price of ₹1,130

Published on July 1, 2025