Zen Technologies Ltd - 92% increase in quarterly sales
A company benefitting from the increasing war spending
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Company name - Zen Technologies Ltd
Last closing price(NSE:ZENTEC) - ₹1899.95 (as on 11-Oct-2024)
Estimated reading time - 3 minutes
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Executive Summary
Designs and manufactures combat training solutions: Zen Technologies specializes in developing high-tech training simulators for defense and security forces, which help enhance combat readiness.
The company has upgraded the revenue target(guidance) for this year to ₹900Cr, which will be 104% growth compared to previous year.
The company has reported significant quarterly sales growth of 92%.
Stock price chart
Detailed analysis
About the company
Designs and manufactures combat training solutions: Zen Technologies specializes in developing high-tech training simulators for defense and security forces, which help enhance combat readiness.
Develops counter-drone technologies: The company also focuses on anti-drone systems to detect, neutralize, and counter threats from unmanned aerial vehicles (UAVs).
Serves global and domestic markets: Zen caters to both Indian and international defense forces, supplying advanced, customizable solutions to meet different combat training and defense needs.
The company has upgraded the revenue target(guidance) for this year to ₹900Cr, which will be 104% growth compared to previous year.
Future prospects
What is the company’s plan to maintain earnings growth in future?
Focus on Counter-Drone Solutions: The increasing demand for counter-drone technology is a key driver. Zen is investing heavily in expanding its range of anti-drone systems, which are critical for modern defense.
Leverage India’s Defense Spending: Zen is well-positioned to capitalize on India’s increased defense budget and modernization efforts. The company aims to win significant contracts, especially for simulators and counter-drone systems, benefiting from the “Atmanirbhar Bharat” (self-reliant India) initiative.
Focus on New Markets: Zen aims to penetrate new geographies, particularly in the Middle East and African markets, which are showing strong demand for defense solutions.
Strong Order Book Execution: Zen’s current order book of INR 800 crore provides a solid foundation for revenue in FY 2025, with a focus on timely delivery and execution of these contracts.
Potential risks that can hamper the future growth?
Supply Chain Issues: The global supply chain was disrupted due to shortages in critical components, delaying production and increasing costs.
Regulatory Approvals: Government defense contracts often faced delays due to extended regulatory processes, affecting order timelines.
Rapid Technological Changes: Keeping up with fast-paced innovations in defense technology, particularly in the anti-drone space, remains a critical challenge. Zen is investing heavily in R&D, focusing on AI and machine learning to enhance its combat training solutions and drone defense systems.
Financial analysis
Overview
The promoter holding is 51.3%, and pledged percentage is 0%.
The company is debt-free and the ROCE is strong at 46.1%.
Quarterly results
Growth in key metrics in the latest quarter Q1 - 2025 compared to the last year’s same quarter -
The company has reported significant sales growth of 92%.
The operating profit increased by 60.8%.
The net profit increased by 64.5% and EPS increased by 63.2%.
Annual results
Growth in key metrics in the last financial year 2024 compared to the previous financial year -
The company reported a strong sales growth of 101%, and operating profit growth of 247%.
The net profit increased by 260% and EPS increased by 282%.
Peer comparison
The company has the highest EPS variance in 3 years at 250% and highest sales growth at 78.86%
Timing analysis
Institutional high trading volume signs seen recently in the week of 7-Oct(3X).
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This is not a stock recommendation. It’s an analysis of the stock basis the data available today, and the viewpoint can evolve in future. Please read our Disclaimer here.
Credits : Financial data source - screener.in