Zen Technologies, a defense company with a focus on intellectual property, is currently trading at an attractive price of ₹1,211.35 with a target of ₹1,535. The company is a leader in land-based simulators with a 90 percent market share and is now expanding into new areas such as drones, electronic warfare, and AI-led defense solutions.
The domestic drone market is expected to grow at a CAGR of 22 percent through FY25-29, reaching ₹2,000 crore in FY29. Zen Technologies has ventured into drones with 100 percent indigenization and has made new acquisitions to strengthen its position in the market. The company is also looking to expand its exports through a new tie-up in the US and by setting up a subsidiary to establish a dedicated supply chain in the country.
With a focus on in-house R&D, an asset-light business model, and high return on equity, Zen is well-positioned to capitalize on the growing demand for defense solutions. The company is trading at an attractive P/E ratio of 21x and is expected to deliver an earnings CAGR of 60 percent through FY24-27. Key risks for the company include delays in awarding tenders and shifts in defense budget allocations away from simulators.
Overall, Zen Technologies presents a good entry point for investors looking to capitalize on the growing defense market. The company’s focus on innovation, strategic acquisitions, and expansion into new segments position it well for future growth and value creation.
