Why You Should Invest in Zen Technologies Now; Q4FY23

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In this post, you will learn why you should invest in Zen Technologies now. You will see how the company is undervalued compared to its peers, based on its financial performance and valuation metrics. You will also see how the company has a huge growth potential, as it operates in a niche and high-demand market. You will also see how the company has improved its margins, declared a dividend and achieved a net energy gain in its nuclear fusion experiment.

Q4 Results: A Strong Performance Amid Challenges

Zen Technologies recently announced its financial results for the quarter and year ended March 31, 2023. The company reported robust growth in revenue and profitability, despite the challenges posed by the COVID-19 pandemic and geopolitical tensions.

  • The company’s consolidated net sales for Q4 FY23 stood at Rs 52.49 crore, up 100.18% year-on-year (YoY) from Rs 26.22 crore in Q4 FY221. The standalone net sales for Q4 FY23 were Rs 32.93 crore, up 166.51% YoY from Rs 12.36 crore in Q4 FY222. The company attributed this growth to the strong order book, timely execution of projects and increased demand for its products from domestic and international markets.
  • The company’s consolidated profit after tax (PAT) for Q4 FY23 was Rs 10.63 crore, up 144.14% YoY from Rs 4.35 crore in Q4 FY221. The standalone PAT for Q4 FY23 was Rs 8.02 crore, up 213.33% YoY from Rs 2.56 crore in Q4 FY222. The company improved its margins by optimizing its costs, enhancing its operational efficiency and leveraging its technological capabilities.
  • The company’s consolidated earnings per share (EPS) for Q4 FY23 was Rs 1.01, up 144.14% YoY from Rs 0.41 in Q4 FY221. The standalone EPS for Q4 FY23 was Rs 0.76, up 213.33% YoY from Rs 0.24 in Q4 FY222.
  • The company’s consolidated net sales for FY23 were Rs 138.67 crore, up 28.64% YoY from Rs 107.77 crore in FY221. The standalone net sales for FY23 were Rs 97.31 crore, up 48.13% YoY from Rs 65.69 crore i\n FY222. The company’s consolidated PAT for FY23 was Rs 25.03 crore, up 38.75% YoY from Rs 18.04 crore in FY221. The standalone PAT for FY23 was Rs 20.05 crore, up 66.67% YoY from Rs 12.03 crore in FY222.
  • The company’s consolidated EPS for FY23 was Rs 2.38, up 38.75% YoY from Rs 1.72 in FY221. The standalone EPS for FY23 was Rs 1.91, up 66.67% YoY from Rs 1.15 in FY222.
  • The company’s board of directors recommended a final dividend of Rs 0.50 per equity share of the face value of Re 1 each for the financial year ended March 31, 20233.


Outlook: A Bright Future Ahead

Zen Technologies is confident of sustaining its growth momentum in the coming quarters and years, as it continues to innovate and deliver cutting-edge simulation and training solutions to its customers.

  • The company has a strong order book of over Rs 300 crore as on March 31, 20233, which provides visibility and stability to its revenue stream.
  • The company is also exploring new opportunities in emerging domains such as artificial intelligence (AI), augmented reality (AR), virtual reality (VR), internet of things (IoT) and cloud computing, which have immense potential to transform the simulation and training industry.
  • The company is also expanding its global footprint by participating in various tenders and exhibitions across the world.
  • The company believes simulation and training are essential tools for enhancing the readiness and capabilities of the defense and security forces, especially in the current scenario of complex and dynamic threats.
  • The company is committed to fulfilling its vision of becoming a global leader in simulation and training solutions by providing world-class products and services to its customers.

Recommendation

Based on the above analysis, we recommend buying Zen Technologies stock with a target price of Rs 350, which implies a PE ratio of 105 based on the consolidated EPS for FY23. This represents a potential upside of 23% from the current price of Rs 282.85 as on May 5, 2023.

We believe that Zen Technologies is a good buy because it has a strong track record of growth, profitability, and innovation; it operates in a niche and high-demand market; it has a diversified product portfolio; it has a global presence; it has a strong order book; it is exploring new opportunities in emerging domains; it has improved its margins; it has declared a dividend; and it is undervalued compared to its peers.

Conclusion

Zen Technologies is a company that has demonstrated its excellence and leadership in the field of simulation and training solutions for the defense and security sectors. The company has achieved remarkable growth in revenue and profitability in Q4 FY23 and FY23, despite the challenging environment. The company has a strong order book, a diversified product portfolio, a global presence, and a vision to innovate and explore new domains. Zen Technologies is well-positioned to capitalize on the growing demand for simulation and training solutions and create value for its customers, shareholders, and stakeholders.

Disclaimer: This is for study purposes only and not investment advice. We are not SEBI-registered analysts and we do not guarantee the accuracy or completeness of any information contained herein. We do not assume any responsibility or liability for any loss or damage arising from or relating to any use of this recommendation. We do not have any affiliation, interest, position, compensation, access, relationship, or conflict of interest with respect to any financial instruments mentioned herein. Please consult your own financial advisor before making any investment decision.

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