1. At a Glance
Zensar reported Q1 FY26 revenue of ₹1,385 Cr and net profit of ₹182 Cr. That’s an EPS of ₹8.01, 15.2% EBITDA margin, and a pipeline glowing with GenAI projects. The stock trades at ₹811 with a P/E of ~27. Cash? ₹315.7 million USD. The punchline? They’re a quiet AI money machine in a sector full of shouting.
2. Introduction with Hook
Imagine a tech company that never makes headlines but keeps compounding silently like your grandfather’s FD. That’s Zensar.
- 3-year stock CAGR? 47%
- Profit CAGR (5Y)? 20%
- AI pipeline + Serbia subsidiary + almost debt-free
Still, it trades like the shy cousin of TCS at a fraction of the multiple. Is it a dark horse in a crowded IT derby?
3. Business Model (WTF Do They Even Do?)
Zensar = full-stack digital transformation for enterprise clients.
Key Segments:
- Application Management Services (AMS)
- Infrastructure Management Services (IMS)
Industry Verticals:
- Hi-Tech & Manufacturing
- BFSI
- Consumer Services
Geographies:
- US (main market)
- UK, Europe, South Africa, India
Buzzwords they drop in every investor call:
- Cloud
- Data & AI
- Experience Engineering
- Digital Ops
4. Financials Overview
| Metric | FY25 |
|---|---|
| Revenue | ₹5,281 Cr |
| Net Profit | ₹650 Cr |
| EBITDA | ₹817 Cr |
| EPS | ₹28.61 |
| Book Value | ₹179 |
| ROCE | 21.3% |
| ROE | 16.4% |
| Market Cap | ₹18,441 Cr |
| P/E | 27.4 |
| Dividend Yield | 1.6% |
Debt is down, profits are up. What’s not to like?
5. Valuation
- EPS TTM: ₹29.68
- Industry P/E Range: 24–32x
- Fair Value Range:
| Scenario | Multiplier | Fair Value |
|---|---|---|
| Bear | 25x | ₹742 |
| Base | 30x | ₹890 |
| Bull | 34x | ₹1,010 |
EduFair Value Range: ₹740 – ₹1,010
CMP ₹811? Smack in the middle. Reasonably valued for a tech play with upside optionality.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Numbers:
- ₹1,385 Cr revenue
- ₹182 Cr profit
- 4.9% YoY growth
- EPS: ₹8.01
- EBITDA margin: 15.2%
- AI & Cloud Expansion: Big pipeline in GenAI + setting up a new subsidiary in Serbia
- $315.7M in cash = ₹2,600+ Cr in war chest
- Dividend payout steady at ~37%
Watch for:
- Continued AI momentum
- FY26 deal wins
- Serbia operations scaling
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity Capital | ₹45 Cr |
| Reserves | ₹4,024 Cr |
| Debt | ₹125 Cr |
| Total Liabilities | ₹5,173 Cr |
| Fixed Assets | ₹1,170 Cr |
| Investments | ₹1,714 Cr |
| Cash + Other | ₹2,288 Cr |
Balance sheet cleaner than a newly formatted SSD. Very little debt, high liquidity.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹714 Cr | ₹-527 Cr | ₹-219 Cr | ₹-31 Cr |
| FY24 | ₹642 Cr | ₹-476 Cr | ₹-197 Cr | ₹-31 Cr |
| FY25 | ₹565 Cr | ₹-473 Cr | ₹-264 Cr | ₹-172 Cr |
Observation:
- Operating cash stable
- Investing = aggressively buying for growth
- Cash still left to burn
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 14% | 25% | 16.4% |
| ROCE | 15% | 25% | 21.3% |
| OPM | 11% | 18% | 15% |
| D/E | 0.06 | 0.04 | 0.03 |
Verdict: Surprisingly sexy. Not Tech-Mahindra-hot, but comfortably Persistent.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹4,848 Cr | ₹552 Cr | ₹328 Cr | ₹14.47 |
| FY24 | ₹4,902 Cr | ₹872 Cr | ₹665 Cr | ₹29.34 |
| FY25 | ₹5,281 Cr | ₹817 Cr | ₹650 Cr | ₹28.61 |
Flat revenue, but high-margin delivery. Management laser-focused on optimization.
11. Peer Comparison
| Company | CMP ₹ | P/E | ROE % | OPM % | Market Cap |
|---|---|---|---|---|---|
| Zensar Tech | 811 | 27.4 | 16.4 | 15% | ₹18,441 Cr |
| TCS | 3,159 | 23.2 | 32.1 | 26.4% | ₹11.4 L Cr |
| Infosys | 1,570 | 24.6 | 28.8 | 24.1% | ₹6.5 L Cr |
| LTIMindtree | 5,175 | 32.5 | 21.5 | 16.9% | ₹1.5 L Cr |
| Persistent | 5,713 | 65.9 | 24.1 | 17.2% | ₹89,467 Cr |
Zensar sits nicely between the legacy giants and growth darlings.
12. Miscellaneous – Shareholding, Promoters
| Holder | Mar ’25 | Jun ’25 |
|---|---|---|
| Promoters | 49.07% | 49.06% |
| FIIs | 14.98% | 14.56% |
| DIIs | 19.89% | 20.52% |
| Public | 16.06% | 15.85% |
- Stable promoter holding (RPG Group)
- FII trimming slightly
- DII interest rising — clearly someone sees compounding value here
13. EduInvesting Verdict™
Zensar is not your flashy startup or bloated IT behemoth. It’s a lean, well-run, RPG-backed, cash-generating machine with AI optionality and global ambitions. Growth isn’t blow-your-mind, but margins and discipline are textbook perfect.
Verdict:
Zensar is like the middle child who never throws tantrums, always scores 85%, and ends up being the CEO. Quiet. Reliable. Rewarding.
Metadata
– Written by EduInvesting Team | July 23, 2025
– Tags: Zensar Technologies, Zensar, RPG Group, GenAI, Cloud, Midcap IT, EduAnalysis
