Multibagger defence stock jumps 4% after Motilal Oswal initiates coverage, sees upside potential of 31%

Shares of multibagger defence stock Zen Technologies (Zen) jumped 4% to its day’s high of Rs 1,405 after the domestic brokerage firm Motilal Oswal initiated coverage on the same with a target price of Rs 1,775.

Motilal Oswal expects the company to grow at a much faster pace than the industry, have a very strong margin and expand its capabilities across other defense segments.

Zen Technologies is a niche player in the defense simulator-based training market. The company has also forayed into the counter-drone market and 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.


The addressable markets for simulators and counter-drones in India are estimated at Rs 14,000 crore and Rs 12,000 crore, respectively, over the next five years.

Zen has established a strong vendor base for simulators and has achieved backward integration for counter-drone 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 Rs 1,400 crore and a likely inflow CAGR of 37% over the next three years, The domestic brokerage firm expects its revenue, EBITDA and PAT to clock a CAGR of 63%, 57%, and 56% over FY24-27.

The company has a portfolio of over 40 products designed and developed indigenously, ranging from live fire, live instrumented, virtual, and constructive training systems for individual and collective training, as well as counter-drone solutions.

Additionally, Zen also boasts 150+ filed patents, with nearly 70 already granted. Notably, the company is self-reliant and does not rely on imports for its supply chain.

In the last one year, the shares of Zen Technologies have surged by 125% while increasing by 692% in two-years’ time frame. The stock has gained 72% in the current calendar year.

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