Up 500% in two years! This multibagger defence stock rally 9% today; more steam left?

Shares of Zen Technologies Ltd surged about 9 per cent during the trading session on Friday after the company announced delivery of its Zen Anti‐Drone System to the Army Air Defense College in Gopalpur, Odisha. The company informed about the same through an exchange filing.  

"Zen Technologies announced the successful delivery of its innovative Zen Anti‐Drone System with Hard‐Kill (Zen ADS HK) to the Army Air Defence College in Gopalpur, Odisha. This marks a significant milestone in bolstering India's defence capabilities against drone threats," said the company's exchange filing with the bourses.  

The Army Air Defence College, which is responsible for training India's Air Defence Corps, placed an order for the Zen ADS HK 18 months ago, based on preliminary successful trials in accurate cueing of automatic gun platform. Zen's team designed, developed, and delivered a system that surpasses expectations, following rigorous testing and trials, it said.  

Following the announcement, shares of Zen Technologies surged more than 8.75 per cent to Rs 996.90 on Friday, commanding a total market capitalization of about 8,400 crore. The defence and aerospace counter had settled at Rs 916.60 in the previous trading session on Thursday.  

Shares of Zen Technologies have zoomed about 3,750 per cent in the last four years, while the stock has surged nearly 500 per cent in the last two years. The stock is up 35 per cent in the last one month, while it has gained more than 25 per cent in 2024 so far.  

The company reported good numbers for Q4FY24 as well as for the full year FY24 with strong financial performance while achieving record sales, profitability and order wins. It has been providing defence training solutions and seamless services to armed forces, security forces, police and paramilitary forces, said Aditya Gaggar Director at Progressive Shares.  

"The company is currently sitting on a robust order book which is exceeding  Rs 1,400 crore as of March 2024. This provides the visibility for upcoming and sustainable growth for the next 3-5 quarters. Coupled with stellar execution and sustained growth for FY25E, the management is optimistic on the growth of the domestic and export markets," he added with a 'buy' rating and a target price of Rs 1,100.  

Zen Technologies is among India’s leading anti‐drone technology and defence training solutions provider. It provides defence training solutions, drones and anti‐drones solutions and has a proven track record in building training systems for imparting defence training and measuring combat readiness of security forces.  

Zen Tech manufactures land based military training simulators, driving simulators, Live range equipment and Anti drone Systems. With a dedicated R&D,recognized by the Ministry of Science and Technology, Government of India, and production facility in Hyderabad, Zen has applied for over 150 patents and shipped more than 1,000 training systems around the world.