Zen Tech share price: Choice sees defence stock rallying 60%; here’s what you should know

Brokerage firm Choice Institutional Equities has reiterated its "Buy" rating on Zen Technologies, a defence and aerospace company, citing strong fundamentals and a healthy order pipeline. In its report dated October 28, the brokerage maintained a target price of Rs 2,150 per share, implying a potential upside of 60 per cent from the current market price of Rs 1343.50

The positive outlook comes despite a muted quarter. The brokerage noted that ZEN delivered a "steady Q2FY26 performance with margin holding firm despite a softer topline." For the quarter, revenue stood at Rs 1,736 million, down 28.2 per cent year-on-year, while Profit After Tax (PAT) came in at Rs 619 million, beating the brokerage’s estimates by 12.5 per cent.

Choice Institutional Equities described the current situation as a "Short-term dip; revival expected in H2." The report stated that order inflow was "slower due to the government's near-term focus on emergency procurement after Operation Sindoor." However, the brokerage remains optimistic about a strong comeback in the second half of the fiscal year.

The bullish stance is supported by a robust order pipeline. Choice highlighted that ZEN's management "reiterated confidence that delayed simulator and anti-drone orders, worth around Rs 650 crore, will materialise in H2FY26." The brokerage expects a "sharp rebound in order inflows" driven by rising domestic and global demand for the company’s systems. Moreover, the management has maintained its "Rs 6,000 crore cumulative execution guidance by FY28."

From a fundamentals perspective, the brokerage noted that the company remains "sound, supported by a debt-free balance sheet, robust EBITDA margin and a strong over Rs 1,100 crore net cash position." Choice added that the "recent stock correction largely prices in short-term execution delays rather than any structural weakness." Reiterating its bullish view, the brokerage said, "we value the stock at 35x FY27–28E average EPS."