Recent developments include Mr Ajay Bhutoria resigning due to personal reasons and Anant goenka taking the spot in the interim. Both moves dont give much confidence. Mr Bhutoria has had health issues for some time so I don’t see this as a rats fleeing the ship scenario though. Mr goenka seems like a left field decision which ignored all of the current executives.
Currently the company is available at just 4.5k or so mcap and all negatives including ceo leaving + margin compression look priced in. Dividend at 2.5 percent looks intriguing but in reality this will drop by a huge amount due to lower profits too. Now the unknowns are
- Who will the new ceo be come July and what will his vision be.
- They’ve shot themselves in the foot regards HR. They need to reverse this soon. While other IT companies have been hit too… zensar has been hit a lot harder.
- Will revenue continue increasing at current 12 percent rate or will it slow down with management change and with the global slowdown
All things considered while there looks to be an MOS forming here I’m still not fully convinced. Results are on the 23rd of January and il be keeping a careful watch then for any green shoots/updates regards management changes. Could still be a few more quarters of pain here but the valuations are very very intriguing
Disc: Not invested yet.
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