Defence stock rises following a ₹46 Cr order from the Ministry of DefenceThe drone solution provider’s stock increased by up to 1% following the company’s acquisition of a major work order from the Ministry of Defence for Rs 46 crore.
Reason to Rise: According to the corporate filing, Zen Technologies Ltd got a coveted work order for Rs 46 crore from the Ministry of Defence for simulators with the Ministry of Defence. The agreement is in force for a duration of five years.
The agreement also highlights Zen’s ability to use cutting-edge simulator technology to meet the strict operational needs of India’s defense forces. With this contract, Zen keeps setting the standard in the field of defense simulation and ensures that the Ministry of Defense’s vital defense assets receive the best possible operational readiness and maintenance assistance.
Financial Situation: In terms of the business’s financial performance, sales increased by 93% from Rs 132 crore i
n Q1FY24 to Rs 255 crore in Q1FY25, yet net profit increased dramatically over the same time period by 64% from Rs 48 crore to Rs 79 crore.
Order book and Inflow: As of June 2024, the firm has an order book of ₹1,158.54 crore. A significant inflow is expected in Q4 FY2025, with a ramp-up beginning in Q3. By FY2025, the management hopes to bring in ₹1,200–1,300 crore, and they anticipate a growth in export income in the next quarters.
Market outlook: There is an increasing need for counter-drone systems, with a move away from soft-kill to hard-kill methods. Over the next three to five years, the management sees a ₹10,000 crore market, with room for adjustments. Leading the market, Zen Technologies possesses important intellectual property for cams, radar, and detectors.
Management Advice: The business anticipates EBITDA margins of around 35% on average for training sims and 30% on average for anti-drone equipment. Export margins might differ depending on the type of product and the needs of the consumer, but they are often larger than domestic margins.
Amazing Return: In just six months, the stock returned 81.15 percent, and in a year, it produced a multi-bagger return of 128.59 percent. As a consequence, the firm would be worth Rs 2.28 lakhs in a year if an investor invested Rs 1 lakh.
Company overview: Zen Technologies Limited is an Indian firm that uses sensors and simulator technologies to create, develop, and produce defense training systems. Land-based military training simulators, driving simulators, live range equipment, and anti-drone systems are among the items offered by the company.
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