Zensar Technologies share price surges 5% on ‘multi-million-dollar contract’ with city of San Diego

Shares of Zensar Technologies rose 5 per cent to hit an all-time high of Rs 439.30 on BSE after the company announced that it has signed a four-year, multi-million-dollar contract with the City of San Diego for Workplace and Enterprise Compute Manage IT Services.
 
“The contract has the option of extension of two additional two-year terms with the total not to exceed the value of $122 million,” the company said.
 
With a market capitalisation of Rs 9,443.24 crore, the share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages. The midcap stock has delivered 142 per cent return to its shareholders in the last 12 months.
 
“This new agreement expands our successful partnership with City which started in 2018, bringing in exceptional value and cost benefits to the City’s constituents,” said Harjott Atrii, Executive Vice President and Head, Digital Foundation Services and Hi-Tech and Manufacturing.
 
“We believe the City will be able to modernize its core systems, accelerating with higher velocity to becoming the leading Smart City of the future. Zensar’s best in class “Smart City” framework will drive a Cloud-First strategy and the adoption of AI enabled autonomics tools, while delivering a unique and secure user experience to the City’s constituents.”
 
The new scope of agreement for Enterprise Compute (EC) Services will provide support for over 1,000 city servers and associated storage and software that host over 300 city application systems.
 
The new agreement for workplace services (WP) will provide service Desk Services to provide a central contact point for all IT services for nearly 5,000 service desk calls each month.
 
According to MarketsMojo, the company has a strong ability to service debt as it has a low Debt to EBITDA ratio of -0.30 times. Also, the company has high institutional holdings at 38.23%.
The technical trend has improved from Mildly Bullish on August 4, 2021, and the stock is technically in a Bullish range now. Multiple factors for the stock are bullish like MACD, Bollinger Band, KST, DOW and OBV.
However, it noted that the stock is trading at a premium compared to its average historical valuations and the valuation seems to be expensive right now.
 
The company reported a net profit of Rs 101 crore for the quarter ended June 2021. Profit in the year-ago period stood at Rs 73.31 crore. Revenue from operations declined 5.4 per cent to Rs 936.80 crore in the June-ended quarter against Rs 991.24 crore a year ago.