This defence stock rose 250% from 52-week low in a year; more upside ahead?

Shares of multibagger Zen Technologies Ltd have rallied nearly 900% in the last three years. The defence stock, which closed at Rs 59.35 on July 14, 2020 ended at Rs 590.15 on July 14, 2023 on BSE. An amount of Rs 1 lakh invested in the Zen Technologies stock three years ago would have turned into Rs 9.94 lakh today. In comparison, Sensex has risen 83.33 per cent during the period.

Zen Technologies stock opened higher at Rs 600.05 in the previous session on BSE. It rose to an intraday high of Rs 607.15 during the sesion. The stock hit a 52-week low of Rs 167.05 on July 15, 2022 and a record high of Rs 654 on July 13 this year . The stock has zoomed 253% from its 52-week low in a year.

Total 1.04 lakh shares of the firm changed hands amounting to a turnover of Rs 6.14 crore in Friday’s session. Market cap of the firm climbed to Rs 4692.28 crore on BSE.

ALSO READ: Rs 8 to Rs 1,258: This solar stock turned into a multibagger in three years, hit record high today

12 promoters held 57.45 per cent stake in the firm and 1.12 lakh public shareholders owned 41.97 per cent for the period ended May 24, 2023. Of these, 109885 resident individuals held 2.27 crore shares or 27.09% stake with capital up to Rs 2 lakh. Only seven resident individuals with 3.89% stake or 32.71 lakh shares held capital above Rs 2 lakh for the period ended May 24, 2023.

In terms of technicals, the relative strength index (RSI) of Zen Technologies stands at 87.1, signaling it's trading in the overbought zone. Zen Technologies stock has a one-year beta of 0.8, indicating very low volatility during the period. Zen Technologies shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

Here’s a look at outlook of the stock which hit record high in the last week.

Also read: Rs 120 to Rs 542: This railway stock scaled all-time high in a year

SBI Securities has initiated coverage on the defence stock with a target price of Rs 651. The brokerage in its buy recommendation said, “At the current price, Zen Technologies is trading at a PE multiple of 38.2x/25.4x/18.2x of its FY24E/FY25E/FY26E earnings, respectively. We recommend buy rating on the stock with a target price of Rs 651 valuing at 42 times of its one year forward earnings.”

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, “The stock has witnessed a strong rally in the past few days from Rs 420 zone to touch the peak of around Rs 650 zone where it has found resistance and slipped to some extent with profit booking witnessed. The near-term support is visible near Rs 545-550 zone and watch for whether it sustains or not. The overall trend is maintained positive and can expect for further rise there is consolidation after the slide near Rs 550 zone.”

Abhijeet from Tips2trades said, "Zen Technologies is bearish & also overbought on the Daily charts with next resistance at Rs 634. A daily close below the support of Rs 576 could lead to a target of Rs 519 in the near term."

In the March 2023 quarter, the drone maker reported a multi-fold jump in March quarter profit. The company reported a standalone profit of Rs 17.27 crore for the March 2023 quarter against Rs 1.40 crore in the corresponding quarter last year. Net sales climbed to Rs 74.14 crore in Q4 from Rs 15.96 crore in the same quarter last year. EBITDA margins expanded to 35.63 per cent from 29.48 per cent in December quarter and 13.46 per cent in the same quarter last year.

Zen Technologies Limited designs, develops, and manufactures defence training systems, based on sensors and simulators technology. The company’s category of products includes land-based military training simulators, driving simulators, live range equipment and anti-drone systems.

Also read: GIFT Nifty up 20 points: Asian markets, crude oil prices, dollar movement, Q1 results & more

Also read: Adani Power, HDFC Bank, LTTS: How should you trade these buzzing stocks