Zen Tech shares crash 24% in 6 sessions; here's what brokerages say

Shares of Zen Technologies Ltd continued their downward spiral for the sixth straight session in Thursday's trade. The stock declined another 5 per cent to hit its lower circuit limit of Rs 1,447.40. With this, it has lost 23.82 per cent over the past six trading days.

Market watchers attributed the correction to the company's disappointing June 2025 quarter (Q1 FY26) results, which missed estimates on both revenue and profit. The underperformance was primarily due to execution delays caused by design changes in an existing project as well as weaker-than-expected order inflows. The lower revenue visibility prompted several brokerages to revise their estimates and cut target prices.

Zen Tech's Q1 performance was muted, weighed down by a fifth consecutive quarter of sluggish order inflow momentum. The company's consolidated order backlog stood at Rs 754 crore, or 0.7 times FY25 sales, compared to Rs 1,160 crore in June 2024.

Motilal Oswal Financial Services (MOFSL) noted that the defence equipment maker expects inflows to pick up from Q2 FY26, which could support execution. However, to account for lower inflows and execution in Q1, MOFSL revised its FY26 and FY27 estimates downward and cut the target price to Rs 1,650 from Rs 1,850.

ICICI Securities also flagged execution delays due to changes in customer specifications as the key reason for the Q1 miss. The brokerage downgraded the stock to 'Hold' from 'Buy', and lowered the target to Rs 1,700.

Nuvama Institutional Equities followed suit, cutting its FY26E/27E EPS estimates by 8 per cent and 19 per cent, respectively. It also reduced the target PE multiple to 40x from 45x and shifted its valuation to September 2027 estimates, resulting in a revised target of Rs 1,800 from Rs 2,170 earlier.

"We believe timely ordering by the Ministry of Defence (MoD) is crucial. Additionally, Zen Tech will need to deliver on its guidance of 50 per cent revenue CAGR, 35 per cent operating margin and 25 per cent PAT margin over the next 2–3 years," Nuvama added.