Key highlights of the 4QFY24
Result Strong performance; Revenue marginally missed our expectation
The Company during FY24 has reported 101%/149%/159% YoY growth in Revenue/EBITDA/PAT up to Rs 439.9 cr/ Rs 180.8 cr/ Rs 129.5 cr respectively. The EBITDA margin expanded by more than 792 bps to 41.1%. The company despite reporting robust performance fell short of our FY24 sales expectations. However, the net profit of Rs 129.5 cr is in-line with our estimate of Rs 130 cr. The execution especially in O&M segment has been lower than our expectation which also impacted the margin on QoQ basis. For FY25, we have lowered our estimates for Revenue, EBITDA and PAT by 7% to 9% due to on going election code of conducts which could impact the order inflows and execution.
Order inflow has been slow but the outlook for FY25 is upbeat: The company’s current order book of Rs 1,402 cr is 3.2x of its FY24 consolidated sales provides strong revenue visibility for next 2 years. The order inflow during the current quarter was soft due to ongoing general election while logistic cost impacted the export orders. The order inflow is expected to vary on QoQ basis but management expects Rs 1,200-1,500 cr of order inflow during FY25.
Guided for Rs 900 cr plus revenue along with EBITDA margin of ~35% for FY25; Exploring inorganic opportunities: The management, for FY25, expects Rs 900 cr plus revenue along with sustainable EBITDA margin of ~35% and targeting Rs 2,000 cr revenue by 2027. The export orders which are 31% at present may surpass in overall order pie. The anti-drone system order is presently at 43% of total orders and 63.4% of total export orders. The management is also exploring the inorganic growth opportunities and has received board approval to raise up to Rs 1,000 cr through QIP or any other equity route.
Valuation still attractive; Maintain buy rating- Target Rs 1,137/- At the current price, the company is trading at 36.8x/26.1x of its FY25E/FY26E earnings respectively. We maintained our buy rating on the stock with upgraded price target of Rs 1,137.0/- thus providing an upside potential of 20.4 %.
Click here to download Zen Technologies Ltd- Rising Star- 4QFY24 Results Update by SBI Securities
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