Zen Technologies: PAT growth of 197% & Revenue growth of 101% in FY24 at PE of 67

100%+ growth in FY25 supported by a strong order book. Revenue CAGR for FY25-27 at 50% to drive revenue to Rs 2,000 cr by FY27. Guiding for EBITDA & PAT margin of 35% & 25% respectively

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1. Defence training & anti-drone solutions provider

zentechnologies.com |NSE: ZENTEC

2. FY20-24: PAT CAGR of 22% and Revenue CAGR of 31%

3. FY23: PAT up 2048% & Revenue up 214%

4. Strong 9M-24: PAT up 247% & Revenue up 143% YoY

5. Strong Q4-24: PAT up 74% & Revenue up 47% YoY

6. Strong FY24: PAT up 197% & Revenue up 101% YoY

7. Business Metrics: Return Ratios improving strongly

8. Outlook: 100%+ revenue growth in FY25

i. FY25: Revenue growth of 100%+

Revenue to more than double from Rs 440 cr in FY24 to Rs 900cr+ in FY25

With a robust order book exceeding ₹1400 crores as of March 31, 2024, we are poised for sustained growth in FY25, aiming to surpass the ₹900 crore sales mark.

iii. FY25-27: Revenue CAGR of 50%+

FY26: Rs 1350 cr

FY27: Rs 2000 cr

iii. Strong Order book: Revenue visibility for FY25

Oder book to be replenished in Q3 and Q4 of FY25

9. PAT growth of 197% & Revenue growth of 101% in FY24 at a PE of 71

10. So Wait and Watch

If I hold the stock then one may continue holding on to ZENTEC.

• Coverage of ZENTEC was initiated after Q1-24 results. The investment thesis has not changed after a strong a strong FY24

• The outlook for ZENTEC is strong in FY25 with a guidance of 100%+ top-line growth on the back of a strong order book.

• One needs to keep a watch on the margins expected to reduce from 43% in FY24 to 35% in FY25

EBITDA margin at 35% for the current financial year, compared to the 43% margin it reported for the full year.

• PAT margin of 25% in FY25 compared to 28% in FY24

• One can continue to ride the business momentum in ZENTEC.

11. Join the ride

If I am looking to enter ZENTEC then

• ZENTEC has delivered PAT growth of 197% & Revenue growth of 101% in FY24 at a PE of 67 which makes the valuations fair in the short term.

• ZENTEC is guiding for a revenue growth of 100% to reach Rs 900+ cr in FY25 from Rs 440 cr in FY24 at PE of 67 which makes the valuations reasonable in the medium term.

• ZENTEC is guiding for a FY25-27 revenue growth of 50% to reach Rs 2000 cr in FY27 from Rs 900+ cr in FY25 at PE of 67 which makes the valuations quite reasonable in the long term.

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Previous coverage of ZENTEC

Zen Technologies: PAT growth of 247% & Revenue growth of 143% in 9M-24 at PE of 57

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