Hold Zen Technologies: target of Rs 1700: ICICI Securities

ICICI Securities recommended hold rating on Zen Technologies with a target price of Rs 1700 in its research report dated July 29, 2025.

Broker Research

July 30, 2025 / 10:54 IST

Hold

26 Aug, 2025 12:21

Volume

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ICICI Securities's research report on Zen Technologies

Zen Technologies’ Q1FY26 numbers undershot consensus estimates. Key points 1) Revenue/EBITDA declined 37.9%/41.9% due to a spillover of INR 600–700mn revenue to the next quarter owing to a change in product specifications; this shall be booked in Q2FY26. 2) Management expects order inflow (OI) of INR 6.5bn by H1FY26-end. 3) Anti-drone system (ADS) order is likely to be part of emergency procurement. 4) Zen is working on the loitering munition; this should be ready for trials in the next 1.5 years. Ahead, management guides for: 1) cumulative revenue of INR 60bn over FY26–28; and 2) EBITDA/PAT margins of ~35%/25%. Given the delays in ordering, we reduce our FY26/FY27 EPS estimates by 30%/22%. We downgrade the stock to HOLD, from Buy, with a revised target price of INR 1,700, based on 35x FY27E EPS.

Outlook

We reduce our FY26/FY27 estimates by 30%/22%. We downgrade the stock to HOLD, from Buy, with a revised target price of INR 1,700/share, based on 35x FY27E EPS.

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