Shares of Zen Technologies have plunged further by 10 per cent from previous low of ₹1,080 to close at its lower circuit following Q3 results. The stock traded nearly 34 per cent lower than Friday’s high of ₹1,472.45.
The stock on Tuesday closed at ₹972 and ₹971.50 on the NSE and BSE, respectively. In addition, it has tumbled over 60 per cent from January this year.
On Saturday, the company announced its financial results, recording 32.7 per cent q-o-q decline in consolidated net profit for the quarter ended December 2024 at ₹42.66 crore as against ₹63.43 crore.
On an y-o-y basis, profit grew 43 per cent from ₹29.84 crore in December 2023 quarter. Revenue from operations also witnessed a similar trend.
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However, brokerages have maintained buy calls at lowered target prices. Nuvama Institutional Equities, which quoted Zen Tech as a prominent beneficiary of India’s defence capital outlay, has lowered the target price from ₹2,200 to ₹1,650, retaining buy.
Motilal Oswal emphasised that Zen underperformed broader indices on concerns related to growth visibility, order inflows, and acquisition plans. The drone manufacturing company’s results sharply missed estimates due to delays in booking certain contracts during the third quarter.
Motilal expects overall ordering to improve beyond FY26 as the company’s overall capabilities are getting enhanced across simulators, anti-drone, and other new areas. However, delay in finalisation of tenders and execution may remain impacted in the near to medium term, Motilal added, reiterating buy call at a target price of ₹1,600.
Analysts of ICICI Securities highlighted a few risk factors such as increasing competitive intensity in active defence system (ADS) and AI-products, delay in ordering or change in product specifications, and lower spending on training by armed forces.
ICICI Securities, although maintaining buy rating, have reduced the target price from ₹2,535 to ₹1,970 due to the uncertainty lingering over order inflow. “We believe the fall in the stock price is mainly market driven and because of uncertainty around order inflow,” they said.
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Zen Technologies recently acquired Applied Research International Pvt Ltd (ARIPL) and ARI Labs Pvt Ltd (ALPL) at ₹130.0 crore. In addition, it had announced investment in Vector Technics Pvt Ltd and Bhairav Robotics Pvt Ltd.
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