Mid-Cap IT Stock Approves Rs 2/Share Interim Dividend For FY24 With 100% Payout: Should I Buy?

Zensar Technologies Outcomes
For the third quarter that concluded on December 31, 2018, Zensar Technologies announced a 110 percent year-over-year (YoY) increase in net profit to Rs 161 crore, compared with the same period in the previous fiscal year. With Rs 1,204 crore in total revenue for the quarter, there was a 0.54 percent YoY rise. The operating margin decreased QoQ, going from 15.65% percent in Q2FY24 to 14.6% percent in Q3FY24.

“Our focus on client centricity and developing a strong go-to-market proposition via our Experience to Engineering to Engagement approach is yielding dividends,” said Manish Tandon, CEO and Managing Director of Zensar. Positive discussions with clients continue, and we anticipate growth consistent with the sector. We will maintain our emphasis on assisting customers with their transformation journeys while doubling down on service lines that will drive development. Our top goal continues to be the transformation of talent via modern skill development.”

“Our disciplined approach on execution has led to consistent financial performance over last 4 quarters resulting in EPS accretion of 110.7% YoY,” said Sachin Zute, CFO, Zensar, in response to questions on the company’s Q3FY24 performance. For the quarter, our Profit After Tax (PAT) was 13.4%, up 700 basis points year over year. The business has gained $68.9 million year over year and is still generating a solid amount of cash. With DSO at 75 days for the quarter, we are still intent on maintaining our strict collection practices. These enhancements highlight our steadfast dedication to improving important financial measures. Furthermore, for the fiscal year 2023–2024, the Board of Directors declared an interim dividend of INR 2.00 per equity share of the business at its meeting on January 22, 2024.”

The target share price for Zensar Technologies
ZENSARTECH, which is now trading around 553 levels, has shown a strong technical pattern on the weekly chart, including a breakout of a cup and handle formation supported by strong volumes, according to Deven Mehata, an equity research analyst at Choice Broking. Despite profit bookings in the wake of the recent highs, there may be a retest of the breakout levels in progress. Notably, ZENSARTECH’s technological robustness is reinforced by the substantial assistance it receives around 515 levels.

As long as the stock stays above its 200-Day Exponential Moving Average (EMA), it will continue to be appealing to investors. It is wise for investors who entered at lower levels to book partial profits at the current market price (CMP) and use a trailing stop loss close to the 515 levels.

It is important to closely monitor the stock’s behavior near the support as a closing below 515 levels might indicate a reversal in the trend. On the plus side, a little resistance near 580 levels can momentarily block more gains. But breaking beyond this barrier, particularly when the market closes, can send ZENSARTECH surging to new all-time highs with levels 650 and higher in sight.

Buying on dips around 535 for new long-term investments and placing a strict stop loss around 515 levels will help you stay in line with any rising trends.