Zen Technologies Q2 Results Review - Steady Performance: Motilal Oswal

Motilal Oswal Report

Zen Technologies Ltd. reported better-than-expected performance of 277%/265%/276% YoY increase in revenue/Ebitda/PAT in Q2 FY25, driven by strong execution. Ebitda margin at 32.9% declined YoY, mainly due to the project and geography mix. Strong revenue performance, higher other income, and lower-thanexpected tax rate resulted in outperformance at PAT level too.

PAT margin came at 27%. Order inflows were weak in H1 FY25 and will start ramping up from H2 FY25 onward. We marginally revise our estimates to factor in the H1 performance and reiterate Buy rating on Zen with a target price of Rs 2,200, based on 40 times two year forward EPS (versus Rs 1,900 earlier).

Zen has the advantage of a faster CAGR in revenue and PAT, stronger margins, and reasonable net working capital. Reiterate Buy.

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