In recent years, defence stocks have garnered significant attention from retail investors, buoyed by the government’s push for indigenous manufacturing initiatives such as “Make in India” and the rising defence budgets alongside modernisation efforts.
Against this backdrop, Zen Technologies, a firm specialising in crafting combat training solutions and counter-drone systems for defence and security forces, has seen a consistent rise in its stock value. This surge is propelled by significant order acquisitions and improved financial results observed over consecutive quarters.
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The company’s shares, which were trading at a price of ₹185 apiece three years ago, are now trading at a price of ₹962 apiece, rewarding their shareholders with a return of 420%. The stock even delivered a whopping return of 1252% over the last four years.
Looking at the yearly performance, the stock delivered a multibagger return of 331% in CY23. On May 03, the stock touched a new peak of ₹1,130 apiece. Regarding financials, the company achieved record sales, profitability, and order wins for both Q4 and for the full fiscal year (FY24).
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In Q4FY24, the company’s revenue surged by 85% to ₹138.04 crore compared to ₹74.33 crore, with a notable improvement in net profit, which soared to ₹33.04 crore, marking a 50% increase from the previous net profit of ₹17.27 crore.
For the full FY24, revenue from operations witnessed an impressive growth of 167%, escalating to ₹430.28 crore, while net profit experienced a substantial surge of 243%, rising to ₹129.23 crore from ₹37.64 crore in FY23.
With an extensive order book exceeding ₹1,400 crore as of March 31, 2024, the company is positioned for sustained growth in FY25, with aspirations to surpass the ₹900 crore sales milestone.
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In a bid to enrich its product portfolio and capabilities, the company has bolstered its investment in research and development. Looking ahead, the company anticipates introducing a range of innovative products tailored to cater to the requirements of both the Indian armed forces and its international clientele.
For over three decades, the company has been dedicated to designing, developing, and manufacturing indigenous sensors and simulator technology for defence training systems. They have consistently provided defence training solutions and seamless services to the Ministry of Defence (Armed Forces), Security Forces Police, and paramilitary forces.
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Jefferies’ report indicates that the defence sector anticipates a significant 13% CAGR from FY23 to FY30. It estimates the domestic defence opportunity to fall within the range of US$ 100–120 billion over the next 5–6 years.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Published: 15 May 2024, 04:00 PM IST
