Shares of Zensar Technologies Ltd. climbed over 9% on Thursday after the IT services company announced robust second-quarter earnings for the fiscal year 2027. The stock reached an intra-day high of Rs 545, up 9.64% from its previous close of Rs 497.05, eventually settling 8% higher at Rs 537. This surge increased the firm's market capitalization to Rs 12,262 crore.
Zensar Technologies reported its Q2 FY27 results on October 28, revealing a consolidated revenue from operations of Rs 1585.2 crore, an 11.5% increase year-on-year. Net profit attributable to owners also saw a healthy rise of 4.4% year-on-year, reaching Rs 190.2 crore. This positive performance was primarily driven by strong growth in its Digital and Application Services segment and enhanced operational efficiencies across the company.
Strong Q2 Performance Drives Growth
The Digital and Application Services segment was a key contributor to Zensar's success, with revenue climbing to Rs 1244.6 crore in Q2 FY27 from Rs 1106.1 crore in the corresponding period last year. The Cloud Infrastructure and Security segment also showed solid growth, with revenue increasing to Rs 340.6 crore from Rs 315.2 crore year-on-year.
Brokerage Reactions and Price Targets
Following the earnings announcement, several brokerages updated their outlooks on Zensar Technologies. Nuvama noted the company's "solid Q2FY27 results," highlighting that revenue grew 4.1% quarter-on-quarter in constant currency to $166.2 million, surpassing their estimate. The EBIT margin also exceeded expectations at 13.4%, an increase of 67 basis points quarter-on-quarter. While net profit (PAT) of Rs 1.9 billion aligned with Nuvama's estimates, Total Contract Value (TCV) was softer at $151.5 million.
Nuvama maintained its 'HOLD' rating on Zensar Technologies but revised its target price upwards to Rs 520, from an earlier Rs 450. This new target values the stock at 14x its average FY28–29E PE. Conversely, Choice Broking adjusted its rating from 'Buy' to 'Add', setting a price target of Rs 615.