Zen Technologies: Strong Execution Meets Lofty Valuation - Motilal Oswal Turns Neutral By Investment Guru India | 20 May 2025
Zen Technologies has reported robust financial performance in Q4FY25, with revenue and PAT significantly exceeding estimates. However, Motilal Oswal Financial Services, in its 20 May 2025 research report, downgraded the stock to ‘Neutral’ from ‘Buy’, citing stretched valuations despite continued operational strength.
“While we remain positive on the company and its ability to capitalize on upcoming demand for simulators and anti-drones, our current estimates and valuations capture the positives,” Motilal Oswal stated.
Financial Highlights (Q4FY25):
Revenue: Rs 2.93 billion (up 116% YoY)
EBITDA: Rs 944 million (margin of 32.2%)
PAT: Rs 849 million (up 177% YoY)
Order inflow: Rs 1.5 billion
Order book: Rs 6.9 billion
The report notes that revenue and PAT for FY25 were broadly in line with estimates at Rs 9.3B and Rs 2.6B respectively. Strategic acquisitions in marine simulations, drone subsystems, and autonomous weapons are expected to support the long-term business model.
Future Outlook
Motilal Oswal has revised its FY26/FY27 estimates upward by 4%/7% and projects:
34% CAGR in revenue
40% CAGR in PAT
EBITDA margins of 37% over FY25–27
The revised target price stands at Rs 1,750, based on 30x Mar’27 earnings. The report highlights that while the medium-term growth outlook remains intact, the recent rally (74% since February 2025) warrants caution on valuation grounds.
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