Shares of Zen Technologies were locked in the 10% upper circuit limit in trade on Wednesday, February 19, crossing the ₹1,000 mark to reach ₹1,069 apiece. This comes as a big relief for the stock, which has been under significant selling pressure in recent sessions, recording its worst period of sustained selloff in recent times.
Today’s rise also marks the end of a three-day decline, during which the stock lost 33% of its value. The stock’s downtrend began after investor sentiment turned negative following the company’s December quarter results, further compounded by brokerage firms trimming their target multiples on the stock.
The company’s Q3FY25 revenue rose 53% year-on-year (YoY) to ₹152.21 crore, while EBITDA increased to ₹66.24 crore. However, margins declined to 38% from 45% due to higher operating expenses. Net profit grew 30% YoY to ₹39.72 crore, but profit margins fell to 22% from 29%.
The order book moderated to ₹816 crore from ₹956 crore in the previous quarter, with ₹1.69 crore in new AMC orders but no new equipment orders.
Meanwhile, the company’s shares have corrected by 60% in less than two months, falling from ₹2,445 apiece to the current trading price of ₹1,069. Despite this sharp correction, the stock is still up 315% over the last two years and 1,700% over the last five years.
In its Q3FY25 concall, management maintained its guidance for FY25: revenue of ₹9 billion, EBITDA margins of 35%, and a PAT margin of 25%. Regarding order inflows, management clarified some delays and now expects domestic orders worth ₹8 billion in Q4FY25 and H1FY26 (excluding export orders), while the broader order inflow guidance (domestic + exports) remains unchanged. Additionally, management reaffirmed its revenue growth guidance of a 50% CAGR over FY26–28.
ICICI Securities sees buying opportunity
Following the December quarter performance, domestic brokerage firm ICICI Securities lowered its target price on the stock to ₹1,970 apiece from the earlier target of ₹2,535 apiece while maintaining its ‘Buy’ rating.
The company’s shares have corrected by 56% in less than two months, falling from ₹2,445 apiece to the current trading price of ₹1,069. Despite this sharp correction, the stock is still up 315% over the last two years and 1,700% over the last five years.
ICICI Securities stated that the sharp correction in the stock price over the past month presents a good opportunity for investors, as broader fundamentals remain unchanged. The firm believes the decline is mainly market-driven and due to uncertainty around order inflows.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
