Neutral Zen Technologies; target of Rs 1400: Motilal Oswal

Motilal Oswal recommended Neutral rating on Zen Technologies with a target price of Rs 1400 in its research report dated October 27, 2025.

Broker Research

October 28, 2025 / 16:15 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Zen Technologies

Zen Technologies (ZEN) posted weak numbers in 2QFY26, with a miss on revenue but a beat on PAT due to higher-than-expected other income. Inflows in 1HFY26 remained weak; however, management expects inflows to revive in 2H due to the finalization of the pending simulator order and improved tendering activity for anti-drone systems under the emergency procurement programs. In addition to its core business, the order book has been strong for ZEN’s subsidiaries, and a combined revenue contribution of ~INR2.5b is expected for FY26 with a fairly strong profit profile. ZEN is already building up capabilities to expand into marine simulators and eventually into air simulation, too. To bake in its 1HFY26 performance, we cut our estimates for ZEN by 25%/11%/ 12% for FY26/FY27/FY28. We also trim our TP to INR1,400 (from INR1,550), based on 30x Sep’27E EPS. The stock is currently trading at a P/E of 62.1x/33.1x/25.1x on FY26/ FY27/ FY28E EPS. Our estimates bake in a revenue/PAT CAGR of 18%/22% over FY25-28 with a strong EBITDA margin of 37% by FY28. We reiterate our Neutral rating on the stock. We would look for order inflow announcements for further sustainability of revenue going forward.

Outlook

We thus reduce our TP to INR1,400 (from INR1,550 earlier), based on 30x Sep’27E earnings. Reiterate Neutral.

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