Zen technologies – A micro cap in the defense space!

A great time to be a shareholder in Zen. As per Q1 con call I have worked out below please correct if any mistakes. For FY24 he had said 3x Fy23 but then had changed to 450CR Revenue so i have assumed appx 500cr given the current order book.

Q1FY24 Rev 132.45CR PAT 47.1CR EPS 5.6

• Huge improvement in the quarter, they have made more profit in the Q than they did the whole of last year.
• Sitting on order book of over 1000cr post 500cr of order booked in July.
• They feel story has just started.
• AMC was 7.68CR and Equipment was 125CR in Q1. AMC revenues was targeted to be 115CR this FY will they achieve that?
• Simulation framework from MoD that was announced by the gov has been a godsend for the company.
• 275CR cash in the company
• Export break up – Sims – 25% Anti-Drone – 75%- mainly Middle East and africa
• Future pipeline – Still might confirm some orders in Q2 with domestic orders. Overall there is a huge sense of urgency in both sims and anti-drone. Market size should be 15000cr for sims over the next 2 years
• 18 months should execute 1000cr order book
• EBIDTA margins are sustainable at 50%
• Internally they have targets for growth which he has described as ‘obscene’ but they will not share numbers – fantastic 3-4 years.
• FY24 will be 3x FY23 and FY 25 – 2xFY24
• BHEL is competition but not much other domestic competition in antidrone. 3-4 RFP for anti drone and he is confident of winning.
• Not much competition in simulators, army sims especially they are very strong domestic driving sims etc there is some competition.
• Has 8.5acres land available for CAPEX if really needed but dont have many capex plans at the moment.
• May look at acquisitions but otherwise will return to shareholders, doesn’t seem to be anything in pipeline.
• Only risk is China doing a blockade of Taiwan
• They are very successful in winning orders and are currently participating in 400-500cr orders