Buy Zen Technologies; target of Rs 1820: Motilal Oswal

Motilal Oswal is bullish on Zen Technologies has recommended buy rating on the stock with a target price of Rs 1820 in its research report dated July 29, 2024.

Broker Research

July 31, 2024 / 12:12 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Zen Technologies

ZEN reported 92%/56%/57% YoY increase in revenue/EBITDA/PAT in 1QFY25, driven by an order book of INR11.6b. EBITDA margin remained strong at 40% as the company continued to benefit from backward integration and control over supply chain. As a result, PAT margin came in at 29.2%. Order inflows will start ramping up from 2HFY25 onward. We marginally revise our estimates to factor in the 1Q performance and maintain BUY rating ZEN with a TP of INR1,820, based on 40x Jun’26E EPS (vs. INR1,775 earlier). The current valuation of ZEN is still cheaper than that of other comparable companies in the private defense sector and ZEN has the advantage of a faster CAGR, stronger margins and reasonable NWC. Maintain BUY.

Outlook

We value the stock at 40x Jun’26E EPS. We marginally revise our estimates to factor in the 1Q performance and maintain a BUY rating on the stock with a revised TP of INR1,820 (vs. INR1,775 earlier). We expect the company to: 1) grow at a much faster pace than the industry, 2) have a very strong margin, and 3) expand its capabilities across other defense segments.

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