Zen Technologies stock locked at 5% lower circuit but holds 119% YTD gains

In the past 12 months, Zen Technologies stock has risen 117 percent, outperforming benchmark Nifty which rallied 30 percent during this period.

Shares of Zen Technologies hit a 5 percent lower circuit on August 29 as profit-booking persisted. The company's market cap dropped to Rs 14,525 crore. The stock had previously surged nearly 20 percent between August 6 and August 26, prompting investors to lock in gains since.

The decline also follows the company's announcement that it plans to use funds raised through its first-ever Qualified Institutional Placement (QIP) for acquisitions.

Zen Technologies designs, develops, and manufactures defence training systems, based on sensors and simulator technology. The company’s category of products includes land-based military training simulators, driving simulators, live range equipment and anti-drone systems.

The company also has a training platform in Hyderabad, with an integration of its complete product range.

Recently, the defence firm raised Rs 1,000 crore via QIP, which was oversubscribed by over five times. The issue was open from August 21 to August 23 and priced at Rs 1,601 per share. The QIP saw participation from several key investors, including Kotak Mutual Fund, WhiteOak Offshore Fund, WhiteOak Mutual Fund, Motilal Oswal Mutual Fund, and Bandhan Mutual Fund.

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“We are looking at 2-3 acquisitions. The size of the acquisition we are looking for is between Rs 100 crore and Rs 250 crore. We are focusing on both the simulation market and the anti-drone systems (ADS) market as we are looking to strengthen ourselves in both segments,” Ashok Atluri, CMD of Zen Technologies told CNBC-TV18 in an interview.

Zen Tech also maintains its export target of Rs 300 crore and aims to grow at a compound annual growth rate (CAGR) of 50 percent. Atluri said the company remains committed to its ambitious growth targets for 2024-25 (April-March). He reiterated the revenue guidance of Rs 900 crore and an EBITDA margin of 35 percent for FY25.

At 1:10 pm, Zen Technologies shares were trading at Rs 1,734.15 on the National Stock Exchange (NSE), locked at the lower circuit. The stock has gained around 119 percent so far this year, doubling investors' capital. In the past 12 months, the counter has risen 117 percent, outperforming benchmark Nifty which rallied 30 percent during this period.

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