Abhishek Sinha
Brokerage firm Choice Institutional Equities has reiterated its “Buy” rating on Zen Technologies Ltd, projecting a sharp 60% upside in the defence stock as order inflows improve in the second half of FY26.
In its latest report, the brokerage maintained a target price of ₹2,150 per share, compared to the current market price of ₹1,343.50, citing strong fundamentals, a debt-free balance sheet, and an expanding order pipeline.
Muted Q2, but H2 revival expected
Despite a weak topline performance in Q2FY26, Choice said Zen Technologies delivered “steady results” with healthy margins.
- Revenue: ₹1,736 million (down 28.2% YoY)
- PAT: ₹619 million — beating estimates by 12.5%
The brokerage termed this phase a “short-term dip” and expects a revival in H2FY26, as the government’s temporary focus on emergency defence procurement post Operation Sindoor begins to ease.
Strong order pipeline to drive next leg of growth
Choice highlighted that Zen’s management remains confident that delayed simulator and anti-drone orders worth around ₹650 crore will materialise in the second half of FY26.
The report added that new domestic and global defence demand will likely trigger a “sharp rebound in order inflows.”
Zen has also reaffirmed its ₹6,000 crore cumulative execution target by FY28.
Financial strength remains robust
The brokerage emphasised Zen Technologies’ strong balance sheet:
- Debt-free status
- Over ₹1,100 crore in net cash reserves
- Healthy EBITDA margins
Choice noted that the recent stock correction “largely prices in short-term execution delays rather than any structural weakness.”
The firm values Zen Technologies at 35x FY27–28E average EPS, maintaining a long-term bullish stance on the stock.
Stock outlook
Zen Technologies has emerged as one of India’s fastest-growing defence tech firms, specialising in simulation-based training systems, anti-drone technologies, and integrated defence solutions.
With improving execution visibility and a strong order book, analysts expect the stock to resume its upward trajectory once fresh defence contracts are announced in the coming months.
Disclaimer:
This article is for informational purposes only and should not be treated as investment advice. Please consult a certified financial advisor before making any investment decisions.
