Multibagger Defence stock Zen Technologies among rising stars for 2024 by SBI Securities: 4 Key reasons

Stock to Buy: Multibagger Defence sector stock Zen Technologies remains among rising star picks by SBI Securities.

Zen Technologies share price having risen 144% in last one year, has risen 2857 % in last five years , having given Multibagger returns to investors.

SBI Securities expects another 20% rise for the Zen Technologies share price in next 12-18 months. The target price for Zen technologies stands at ₹2214 as per SBI Securities.

4 key reasons for more upside

1. Strong Execution leading to earnings growth- As Q2 held the testimony, net profit grew 365% while first half net FY25 profit growth crossed the full-year FY24 figures. The Ebitda margin improved 457 bps to 33.1% during the quarter and the sustainable EBITDA margin guidance is 35-36% in a longer time frame. The growth is led by strong order execution though inflows of orders during the quarter were muted, highlighted SBI Securities

2. Firm order outlook for FY25 -

The current order book of ₹957 crore is 0.96x of its 1HFY25 annualized sales, highlighted analysts at SBI Securities. The expectations are for large orders to coming in 2HFY25 and expectations are of ₹1,200-1,500 crore of order inflow during FY25

3. Set to achieve FY25 guidance: The company is on track to achieve its full-year FY25 revenue guidance of ₹900 crore and SBI Securities believe that with strong performance so far, there is an upside risk to the guidance.. The 4 product launches awkeye, Barbarik-URCWS (Ultralight Remote Control Weapon Station), Prahasta, and Sthir Stab 640 are likely to create 3rd revenue vertical in the long term in addition to ADS and simulators

4. Fund raising adds to possibilities for inorganic growth:

The management raised ₹1,000 crore at ₹1,601 per share (about 7% equity dilution) after completing the QIP on August 24. These funds will be utilized to look for inorganic growth prospects and by the end of the current fiscal year, some deal may get finalized.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.