Zensar Technologies Limited

Technology — Information Technology Services · NSE

₹506.00+₹1.55 (+0.31%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by high debt relative to equity, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Zensar Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Zensar Technologies Limited, a digital solutions and technology services company, provides technology consulting and system integration services in India, the Americas, Europe, Africa, and internationally.

IndustryInformation Technology Services

SectorTechnology

Employees10,066

Annual revenue₹5,687 Cr

How does it make money?

Turns over ₹5,687 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 10,066 employees supports ₹56.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin19.0%

Net margin13.6%

Revenue / employee₹56.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Some evidence

ROCE of 20.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE20.9%

ROE16.4%

Peer median ROE32.0%

What is the outlook?

12 analysts covering the stock expect revenue to grow about 7.9% and earnings to grow about 13.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+7.9%

Est. earnings growth+13.4%

Analysts12

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +17% while net margin moved +102% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+17%

Margin effect+102%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.23 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

74/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

15.0x

3Y Median

26.4x

40 monthly readings · mean 28.3x · range 12.5x–55.1x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 43% below its 3y median of 26.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Cheap

26.4x median over 40 months · -43%

vs. sector peers

Fair

16.5x median of 4 peers · -9%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

15.0x

P/B

2.44x

EV/EBITDA

10.3x

PEG

0.45

Dividend Yield

2.96%

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 13.2% to 19.0% over 3 years.
Debt is being paid down
Total debt is down 71% over 3 years.
Return on equity is rising
ROE has improved from 11.0% to 16.4%.
Return on capital is rising
ROCE has improved from 14.4% to 20.9%.
High return on capital employed
ROCE of 20.9% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 15.0x the stock trades 43% below its own median of 26.4x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 1.68x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.9% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 13.2% to 19.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 71% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 43% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 1.68x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 5.5% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 17%✓ 19.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 5.5% CAGR
Latest reported year was 8.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹717 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 20.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹11,484 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.0x

Cheap

Cheap against the generic band

P/B Ratio

2.44x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹33.74

Profitable

Profitable on a per-share basis

ROE

16.4%

Strong

Strong capital efficiency

ROCE

20.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.68x

High

High leverage

Revenue Growth (YoY)

8.9%

Modest

Modest growth

Profit Growth (YoY)

0.9%

Modest

Slow profit growth

Dividend Yield

2.96%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹717 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹506

P/E (Forward)

13.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

12.8%

Average

Average margins

Net Margin

13.4%

Good

Strong bottom-line conversion

Current Ratio

3.52

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

22%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

448.8 / 461.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

78.8

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,848 Cr	₹4,902 Cr	₹5,281 Cr	₹5,687 Cr	+5.5%
EBITDA	₹639 Cr	₹992 Cr	₹915 Cr	₹1,082 Cr	+19.2%
EBITDA Margin	13.2%	20.2%	17.3%	19.0%	—
PAT (Net Profit)	₹328 Cr	₹665 Cr	₹650 Cr	₹775 Cr	+33.2%
EPS	₹14.4	₹29.13	₹28.43	₹33.69	+32.8%
ROE	11.0%	18.7%	16.0%	16.4%	—
ROCE	14.4%	23.6%	20.4%	20.9%	—
Total Debt	₹273 Cr	₹187 Cr	₹125 Cr	₹79 Cr	-33.8%
Free Cash Flow	₹678 Cr	₹626 Cr	₹528 Cr	₹717 Cr	+1.9%

🟢 Revenue has grown at 5.5% a year over 3 years.

🟢 EBITDA has grown at 19.2% a year over 3 years.

🟢 EBITDA Margin has risen from 13.2% to 19.0% over 3 years (+5.9 pts).

🟢 PAT (Net Profit) has grown at 33.2% a year over 3 years.

🟢 EPS has grown at 32.8% a year over 3 years.

🟢 ROE has risen from 11.0% to 16.4% over 3 years (+5.4 pts).

🟢 ROCE has risen from 14.4% to 20.9% over 3 years (+6.5 pts).

🟢 Total Debt has shrunk at 33.8% a year over 3 years.

🟡 Free Cash Flow has been broadly flat over 3 years (1.9% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹6,084 Cr

Total Liabilities

₹1,364 Cr

Total Debt

₹79 Cr

Cash & Equivalents

₹416 Cr

Operating Cash Flow

₹771 Cr

Capex

-₹54 Cr

Shareholding (proxy)

Institutional Holding

25.6%

Insider Holding

50.1%

Corporate Actions

Dividend Rate

₹15

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

8 Buy · 4 Hold · 0 Sell

Target Price (Mean)

₹566.58

+12.0% vs CMP

Target Range

₹427 – ₹680

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

3 mixed3 general

Zensar Technologies (NSEI:ZENSARTECH) Stock Forecast & Analyst Predictions

Simply Wall Street, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Zensar Technologies Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 04 Sept

Zensar Technologies (ZENSARTECH) Share/Stock Price Live, NSE

TechGraph, 12 Oct

Top stocks to buy: Why experts suggest Tata Elxsi, Zensar Tech, Havells India | Check target, support, stop loss

Livemint, 15 Oct

Zensar, HCL Technologies rebounded from 100-month EMA support, says analyst

Business Standard, 16 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Zensar Technologies Share Price Target 2026 — Analyst Forecast, Bull & Bear Case

Univest, 20 AprAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟢Business QualityStrong15.4/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong13.1/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive11.8/15

🟡RiskModerate4.8/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 17%19.0%
✓Revenue growth stays above 4% a year5.5% CAGR
✓Free cash flow remains positive₹717 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 18%20.9%