IT stock is trading near 52 week low. Brokerage rises after first quarter results

Deal wins for the quarter were down 24.5% QoQ and 29.3% YoY to $125 million, with a healthy mix of new wins and renewals. Hi-tech and manufacturing verticals are witnessing a slowdown. According to brokerage and research firm ICICI Securities, the consumer services sector is also seeing a reduction in discretionary spending.

“Management is seeing a slowdown in business and some clients have pointed to a reduction in spending amid macro-uncertainties,” the note said. Brokerage house maintains buy rating zensar tech share with target price revision from 276 295.

Going forward, management expects a short-term impact from existing macro-challenges and continued supply-side constraints. ICICI Securities expects margins to be under pressure given supply-side issues, gradual return of travel and facility cost, and investments for growth.

Further, it expects a weak supply side engine as well as reduction in discretionary spending by customers in consumer services/hi-tech/manufacturing verticals, due to challenging macro environment likely to limit further earnings growth .

“Management noted that it faced higher supply-side pressure, which impacted margins; revenue growth remains strong and delivered its highest USD revenue ever. It hit the mid-teens margin target by a few quarters. to Q2FY24E. We are cutting FY23E/FY24E EPS to include reduction in earnings by up to 4.8%/1.3%, while maintaining ‘Buy’ tag on IT stock with unchanged target price of happened 406.

Shares of Indian IT services provider Gensar Tech are hovering near their 52-week low. IT Stock In 2022 (YTD) it has declined by over 57% so far.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.

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