Results: Zensar Technologies Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
Last week saw the newest first-quarter earnings release from Zensar Technologies Limited (NSE:ZENSARTECH), an important milestone in the company's journey to build a stronger business. Zensar Technologies reported ₹15b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹7.99 beat expectations, being 5.1% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the eleven analysts covering Zensar Technologies are now predicting revenues of ₹62.2b in 2027. If met, this would reflect a satisfactory 7.0% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be ₹33.92, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹61.9b and earnings per share (EPS) of ₹34.63 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for Zensar Technologies
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹570, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Zensar Technologies, with the most bullish analyst valuing it at ₹695 and the most bearish at ₹418 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Zensar Technologies' growth to accelerate, with the forecast 9.4% annualised growth to the end of 2027 ranking favourably alongside historical growth of 7.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Zensar Technologies to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zensar Technologies. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Zensar Technologies analysts - going out to 2029, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Zensar Technologies , and understanding it should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.