Highest Ever Dividend In 5 Years: IT Stock Declares Rs 7/Share Payout; Should You Buy The Stock?

Zensar Technologies has declared financial results for its fourth quarter, ending March 31, 2024, of the fiscal year 2023-2024. In addition, the company announced a dividend of Rs 7 per share, its highest payout since 2019. Following the announcement, the shares of Zensar Technologies ended 7.96% higher at Rs 621 apiece on Friday.

Zensar Technologies Dividend

The Board of Directors of the company considered and approved the "Recommendation of final dividend at INR 7 each (350%) per equity share of INR 2 each, for FY 2023-24, subject to approval by Members at the ensuing Annual General Meeting ("AGM"). The record date for the purpose shall be announced in due course. The dividend, if approved, shall be paid/dispatched to the shareholders within 30 days of its approval by the shareholders, at the AGM," said Zensar Technologies in a regulatory filing.

Zensar Technologies Q4 Results

Consolidated sales for the firm increased by 1.4% to Rs 1229 crore in Q4FY23 from Rs 1212 crore in the same period last year. From Rs 119.2 crore in Q4FY23 to Rs 173.3 crore in Q4FY23, net profit jumped by 45.38%. Annually, sales increased by 1.09% to Rs 4901 crore in FY24 from Rs 4848.2 crore in FY23. Compared to Rs 327.6 crore in FY23, net profit shot up 103% to Rs 665 crore in the last fiscal year. EBITDA in Q4FY24 was 16.5%, with a 200 bps quarterly YoY gain and a 70 bps sequential QoQ fall. From $144.5 million in the December quarter to $148.1 million in the March quarter, there was a 2.5% rise in revenue in dollar terms.

Manish Tandon, CEO and Managing Director, Zensar, said, "Sequential growth across all our verticals is a testimony of our robust strategy and our bias towards execution excellence. Our expertise in managing digital products, experiences, and engagement for our clients makes us a preferred partner of choice. We moved strength to strength in our client centricity journey by achieving our best customer experience score ever in FY24. We expanded our market reach with the help of our diversified service offerings. We continue to focus on client and employee satisfaction as our primary pillars of success. Our results give us the confidence to continue strategic investments in our service lines and enhance our capabilities in new age technologies such as Gen AI to foster innovation and deliver growth."

Sachin Zute, CFO, Zensar, commenting on the FY24 performance, said, "We have achieved strong financial results for FY'24 owing to our focused efforts towards operational excellence & margin improvement tracks which helped us improve our EBITDA by 640 bps to 17.8% and PAT by 690 bps to 13.6% on YoY basis. Our cash stood at $261.7M and we further improved our DSO to 73 days at the end of FY'24. We continue to have strong momentum in our order book which grew by 22% YOY and stood at $698M for the year. For Q4FY24, our reported revenue is $148.1M growth of 2.4% sequentially and 2.0% in constant currency. EBITDA margin for Q4 stood at 16.5% which is above our guided range."

Zensar Technologies Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said, "The current trading price of ZENSARTECH is Rs 620.75. The stock has recently formed a rounding bottom pattern on the weekly chart with a significant increase in trading volume, indicating a potential breakout. If the price manages to close above the Rs 640 level, it may have the potential to reach short-term targets of Rs 745. On the other hand, immediate support levels are located at Rs 580 and Rs 570. These levels can be considered as opportunities to buy on dips. The Relative Strength Index (RSI) currently stands at 61.4 and is trending upward, indicating increasing buying momentum. Furthermore, the Stochastic Relative Strength Index (Stoch RSI) has recently experienced a positive crossover, moving out of the oversold region."

"These technical indicators, when considered together, suggest that ZENSARTECH has the potential to reach a target price of Rs 745 in the near future. To prudently manage risk, it is advisable to set a stop-loss (SL) at Rs 780. This precaution will help protect your investment in case of an unexpected market reversal. In summary, considering the technical analysis and the current market conditions, ZENSARTECH appears to present an appealing buying opportunity for those aiming for a Rs 745 price target, provided that appropriate risk management measures are in place," Mandar Bhojane further added.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.