46,915% All-Time Gains: Not BEL, HAL Or BDL, But Smallcap Defence Stock Below Rs 1,400, To Rise Over 27% Ahead

Motilal Oswal highlighted on Thursday that Zen Technologies is a niche player in the defense simulator-based training market. The company has also forayed into the counter-drone market. The addressable markets for simulators and counter-drones in India are estimated at ~INR140b and INR120b, respectively, over the next five years.

The brokerage added that the company commands a significant market share in both of these segments, with just 2-3 players in the defense simulator market and 5-6 players in the counter-drone market.

Motilal said, "ZEN has established a strong vendor base for simulators and has achieved backward integration for counterdrone solutions, resulting in strong margins and a high RoCE. The company is also planning to foray into newer defense segments. With a healthy order book of INR14b and a likely inflow CAGR of 37% over the next three years, we expect its revenue/EBITDA/PAT to clock a CAGR of 63%/57%/56% over FY24-27."

There is a potential upside of over 27% in Zen as Motilal fixed target price of Rs 1,775 on Zen Tech.