ZENTEC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.3

📊 Core Financials Overview

Profitability

ROCE: 32.9% and ROE: 24.6% — excellent, reflecting strong capital efficiency and shareholder value creation.

EPS: ₹25.0, though PAT dropped from ₹84.9 Cr. to ₹37.1 Cr. — a steep 50% decline, likely due to cyclical or project-based revenue fluctuations.

Debt-to-equity: 0.03 — virtually debt-free, a major strength for long-term sustainability.

Dividend Yield: 0.12% — minimal, indicating reinvestment focus.

Institutional Sentiment

FII holdings increased slightly (+0.09%), while DII holdings declined (-0.72%) — mixed sentiment, possibly reflecting valuation concerns.

💰 Valuation Metrics

Metric Value Insight

P/E Ratio 64.8 High vs. industry average (75.1) — relatively fair for a high-growth tech defense firm.

P/B Ratio ~8.67 Elevated, typical for asset-light, IP-driven businesses.

PEG Ratio 0.16 Very attractive — valuation well-supported by earnings growth.

Intrinsic Value ~₹1,500–₹1,580 (est.) Current price of ₹1,621 is slightly above fair value.

🧠 Business Model & Competitive Edge

Core Operations: Zen Technologies Ltd. (ZENTEC) develops and manufactures defense training simulators, combat systems, and anti-drone technologies.

Strengths

Strategic alignment with India’s defense modernization and export push.

Strong IP portfolio and R&D capabilities.

High operating leverage and scalable business model.

Challenges

Volatile quarterly earnings due to project-based revenue recognition.

RSI at 61.9 — nearing overbought territory, MACD at -5.01 — bearish crossover.

Volume spike suggests speculative interest, but trend needs confirmation.

📈 Entry Zone & Technicals

DMA 50: ₹1,569, DMA 200: ₹1,631 — price is hovering between both, indicating consolidation.

RSI: 61.9 — neutral to slightly overbought.

MACD: -5.01 — bearish momentum.

📌 Entry Zone: ₹1,500–₹1,580 — ideal for accumulation on dips.

🕰️ Long-Term Holding Guidance

2025 Target: ₹991–₹1,900

2026 Target: ₹1,900–₹2,812

2027 Target: ₹2,812–₹3,009

2030 Target: ₹3,500+

Holding Strategy: ZENTEC is a high-growth defense tech play with strong fundamentals, low debt, and strategic tailwinds. Ideal for long-term investors seeking exposure to India’s defense and simulation sector. Accumulate during technical weakness and hold through multi-year cycles.

You can explore ZENTEC’s valuation and forecast breakdown

1

or review its fundamental analysis summary

2

for deeper insights.

1

stocks-buy.com

2

www.topstockresearch.com

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