Zen Technologies - IP At The Core; ICICI Securities Initiates Coverage With A Buy

ICICI Securities Report

We initiate coverage on Zen Technologies Ltd. with a Buy rating. Key points:

1. An intellecutal property-driven business with a solid inhouse research and development track record.

2. Recurring revenue from AMCs compliments product development.

3. Robust potential in simulator/anti-drone markets.

4. Favorable regulatory tailwinds aiding Zen’s technological edge.

5. Implementation team’s significant field experience resulting in right product for all conditions.

6. Attractive valuation versus peers.

On balance, we see Zen at a vantage, gaining from market potential and demand across its segments – both strong allies to its high earnings growth trajectory.

We peg EPS CAGR at 65% through FY26E and return on equity of >30% through to FY26E.

We value Zen at 45 times FY26E EPS, resulting in a target price of Rs 2,000, 48% upside potential compared to current market price.

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