loader2
Login Open ICICI 3-in-1 Account
  • Text Size
  • Text to Speech
  • Color Contrast
  • Pause Animations

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Hidden Gem : Zen Technologies : (Target Price 1900) Riding next-generation warfare transformation

ICICIdirect Research 22 May 2026 DISCLAIMER

Zen Technologies has been primarily into manufacturing combat training and simulation systems for Indian Army. The company is now increasing its focus on developing and manufacturing counter-drone systems considering the strong demand for these platforms as the modern warfare is changing significantly and shifting towards asymmetric threats. 
As per the industry estimates, the anti-drone market is projected to grow at a robust ~30% CAGR over the next 10 years, positioning Zen favourably in a high-growth niche marketspace. Though the simulation market is growing at a lower rate (~7% CAGR), Zen is expected to gain market share led by increasing its exposure into Naval simulation systems also 
Order inflows remained muted during FY25 and H1FY26, primarily due to delays in government approvals. The order delays impacted FY26 revenues (~29% YoY). However, order inflows revived sharply from H2FY26, which helped in total order intake of ₹ 1332 crore in FY26 (vs ₹ 264 crore inflow in FY25). Order backlog currently stands at ₹1,336 crore (2x FY26 revenue) 
With a strong executable order book and improving procurement environment, the company has guided for revenues of ~₹1,000 crore in FY27 (45%+ YoY) and ~₹3,000 crore in FY28. EBITDA margin guidance has been maintained at ~35%, reflecting strong operating leverage and product mix 
The company had raised ~₹980 crore through QIP, of which ₹410 crore earmarked for working capital has already been fully utilized. Around ₹170 crore has been deployed towards inorganic expansion in drones, anti-drone and simulation businesses, while the remaining ~₹170 crore for acquisitions is yet to be utilized and provides further expansion optionality 
We are conservatively estimating revenue CAGR of ~58% over FY26-28E (lower than management’s guidance of 108% CAGR) with steady margin of 35-36%. 
Valuation at 29x P/E on FY28E looks attractive as compared to industry peers. We have a target price of ₹ 1900 (valued at 35x P/E on FY28E)

Download
ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download
ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere