Zen Tech down 11% in 4 days: Defence stock worth a buy?

Zen Tech share price targets: Zen Technologies Ltd (Zen Tech) has seen its shares falling 11 per cent in four straight trading sessions. The weakness on the counter has been observed, especially after the defence maker reported a sharp decline in March quarter performance, with consolidated revenue and Ebitda falling 45.2 per cent and 63 per cent YoY, respectively. A couple of analysts said Zen Tech’s Ebitda margin contracted sharply by 1,382 basis points (bps) YoY to 28.6 per cent, impacted largely by lower output and additional expenses during the quarter. For now, they kept their ‘Buy’ rating on the stock intact. 

On the positive side, said Antique Stock Broking,  order inflows strengthened meaningfully in H2FY26, with the consolidated order book rising 50 per cent YoY to Rs 1,330 crore. The company management remained optimistic about closing a few large orders in the current quarter, which should further improve revenue visibility, the brokerage said. 

Based on the current order book and expected inflows, the company is targeting Rs 1,000 crore revenue in FY27E, which Antique believes is achievable. 

“Following a decline in FY26E, we expect earnings to rebound in FY27E, supported by execution of the expanded order book. With defence electronics stocks having rallied over the past three months, Zen’s relative valuation discount has widened. We maintain Buy with a revised target price of Rs 1,700 (earlier Rs 1,679),” it said.

From a closing price of Rs 1,719.70 on April 27, Zen tech shares fell 11.15 per cent to Rs 1,527.80 on Monday.

Elara Securities said it has maintained ‘Buy’ on the stock with lower target price of Rs 1,870, as the brokearge cut its FY27 earnings estimates by 16 per cent and on lower-than-expected closing orderbook, due to delayed inflows. “We lower our target to Rs 1,870 from Rs 2,025 on 32 times (from 35 times) March FY28E P/E, lower than private companies’ P/E, given the delay in order inflows in FY26 and overall weak performance for the year. We reiterate Buy, as successful demonstration of the products portfolio would drive demand domestically and on the exports front,” it said. 

Elara said India’s defence budget jumped 18 per cent YoY and augurs well for simulators, drones and counter drone systems. It sees an earnings CAGR of 45 per cent during FY26-29E with an average ROE and ROCE of 20 per cent each during FY27-29E.