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Indian equity markets slipped deeper into the red on Monday after a weak opening, with selling pressure intensifying across sectors as investors turned cautious. The Sensex fell more than 400 points, while the Nifty dropped over 115 points to slip below the 26,250 level, tracking weakness in IT, metals and select financial stocks.

Amid the broader market decline, brokerage HDFC Securities has named Zensar Technologies as its ‘Pick of the Week’, recommending the stock for investors with a two- to three-quarter investment horizon.

In its latest note, HDFC Securities said Zensar has quietly built a stronger foundation over the past few years through a mix of organic expansion and selective acquisitions, positioning the company for steadier growth even as near-term IT spending remains uneven.

The brokerage highlighted that Zensar’s increasing focus on AI-led solutions, operational efficiency and diversification across client segments has begun to show up in execution quality. It added that ongoing cost optimisation and productivity-led initiatives are being reinforced by investments in cloud modernisation, cybersecurity services and early-stage generative AI offerings.

According to the brokerage, these initiatives, coupled with a reasonably healthy deal pipeline, should support sustainable growth over the medium to long term, even if near-term demand remains selective.

HDFC Securities has estimated Zensar’s base-case fair value at Rs 770 per share, while its bull-case valuation stands at Rs 830 over the next two to three quarters.

The brokerage has advised investors to accumulate the stock in the Rs 685–715 range, with further buying recommended on declines towards Rs 625–640. Based on these levels, the stock offers an upside potential of up to 19 per cent, it said.

Headquartered in Pune, Zensar Technologies is an IT services company deriving most of its revenue from service-led offerings, including Digital Application Services (DAS). Its portfolio spans core application services as well as digital and experience-led solutions.

The company serves clients across key sectors such as manufacturing, retail, and banking and financial services (BFSI). With a workforce of over 10,500 employees across 33 locations, Zensar provides engineering and technology solutions to more than 145 global enterprises.

The brokerage acknowledged that Zensar’s deal pipeline moderated in Q2FY26, declining 7.7 per cent quarter-on-quarter and 21.4 per cent year-on-year. During the quarter, the company reported order wins of $158.7 million, lower than $172 million in Q1FY26 and $213.5 million in Q4FY25.

However, HDFC Securities noted that the underlying pipeline remains intact, with momentum being driven by vendor consolidation, outcome-based engagements and a gradual shift towards longer-duration, managed services contracts. These deals, while fewer in number, tend to be more complex and higher in quality, offering better revenue visibility over time.

According to the report, Zensar continues to prioritise execution discipline and long-term growth, led by its advanced engineering and experience services businesses. The company is also stepping up its global expansion, with plans to establish a new subsidiary in Brazil.

Zensar is sharpening its focus on AI-driven platforms such as ZenseAI, while strengthening its presence in the BFSI and healthcare verticals, which are expected to contribute meaningfully to growth over the next few years.

Looking ahead, HDFC Securities expects revenue growth to accelerate, projecting 10.3 per cent growth in FY27E and 12 per cent in FY28E. The brokerage said this would be supported by healthy deal wins, a recovery in healthcare and life sciences, and improved stability in top client accounts.

While near-term market volatility may persist, the brokerage believes Zensar’s evolving business mix and execution focus position it well for gradual and sustainable growth.