Was studying the company recently from a quick fundamental perspective. Sharing for reference. Disclosure: Not invested. Please see attachment for more details
Zen Technologies – Quick Analysis.docx (26.6 KB)
CONCLUSION/SUMMARY
Market Cap: Rs 2500 cr; Price~ 300
PE: 48x (on annualised profits of Q3FY23)
Business Thesis: Niche player supplying simulation training equipment (design to after sales) for Defence (R&D spend is over 10% of sales). Revenue mix is 70% equipment sales and 30% AMC. Order book at Rs 404 cr is strong at 2.7x revenues with further orders expected, given that the company is the only player in this space. Net profit margins are as high at 20% and can lead to profits more than doubling to Rs 80 cr in FY24 if orders are well executed. Business, revenue flow and operating margins are lumpy, as it is a tender business; operations are highly working capital intensive. Scale can deliver higher consistency in margins and profits. Rakesh Jhunjunwala exited in 2013, under buyback @ Rs 70.
Technicals: Sharp upmove after cup breakout in week ending Feb 13, 2023; price more than 15% higher than 11 WEMA. Better to wait for tightening or pullback as risk return is not favourable now. RS and ADX strong
| Subscribe To Our Free Newsletter |
