The recent run up is due to this
we might see order announcement
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Zen tech does not support simulators for air force as of now. I remember it was mentioned in one of the concall
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I respect mr basnat sir, but 50% min growth with 70 PE bohot na insafi he
150-160 cr of sales they can do easily but for 900cr FY2025 target they need all quarter 200+ thatâs something we need to look at
If the government changes, how do you see its impact on the future outlook? Because many times, the first thing a new government does is reverse all the policies.
If BJP come back sure shot 1500+ targets till FY 2025
24 EPS 60-65 PE for PE they need orders last year in Q2 they got 900 cr of orders and management claiming growth in orders with respect to previous one
Broken out 6 months consolation sometimes is cooking inside company may be 1200 coming soon before or after Q4 results
They are regularly releasing the order book, currently they have enough backlog to achieve FY25 target, the main test will be to see if they can get enough orders over the next 6 months to continue growth in FY26.
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Excellent video which gives glimpses of all major products as well as the strategy.
Regards,
Raj
Disc: Invested.
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This is the interview of CEO from 3 Dec 2015 where he says we will most likely achieve roughly 500 crore orders (since they get done around 95% successful bids typically)
revenue in next 1-2 years.
(https://www.youtube.com/watch?v=-a2PXFoP4YY)
I have seen the whole interview, The guidance CEO gave was way âtooooâ much because i donât observe in sales anything remotely correlating to 500 crores spread over 2-3 years of sales.
Anyone knows why they missed the self-professed guidance targets by a mile in the past?
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He says âcumulative in the next 2-3 yearsâ. But even that is way off the mark. Cumulatively from FY17 to FY19 Zen achieved about 190 Cr in revenue. In fact, cumulatively from FY17 to FY22 Zen did a total of about 450 Cr in revenues. So you are right, the CEO is way off the mark.
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I think the may metric to keep track off is the order book. Currently they have 1400CR order book so this guarantees the turnover for the next 18 months. I think the main issue in this business is that the time lag between the tender process, award process etc can cause major uncertainty. The one point I dont fully understand is why it takes so long for them to execute the order book when capacity is supposedly never a constraint.
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One of the reasonn could be the value of AMC contract may be shown in orderbook. This is just a hypothesis from my end.
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No new orders no interview already price action taken place 15 rs eps is expected 70 PE normally it gets very hard to break 1050 after results too. Sideways movement till they win big orders otherwise de rating will start despite 900cr rev for next FY as they are guiding
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Sir, the interview link given below came just 2 weeks back. Company has orders for FY25 and have been stating it time and again, like you said. Last orders of 93 cr. from MoD came about 2 months back. The story is good. Price, like you said may have run up little ahead of numbers. But is it actionable ? I mean, is it at a level where one should sell and get out of the story completely or sell & wait for significant dips to add again ?
Fundamentally one would do good to read up the document âFramework for Simulators in armed forcesâ. Attaching below. My sense is, the opportunity in air force & navy (in addition to ground forces combat simulation) is huge, company needs to work hard to meet those requirements. The company has laid a solid foundation on which it can build further. One of the few companies which has done the tough task of R&D for so many years from itâs own pocket when the attitude from their primary customer (govt.) was to ignore them. Now the tide has changed, they are actively encouraged.
If they have to meet their FY24 guidance of 450 cr. topline, they have to post about ~150 cr. topline and around 50 cr. bottom line in Q4. That would make the PE multiple close to 50-55 times trailing. Given their guidance of doubling the nos. in FY25, itâs 20 odd times of current year. Market is perhaps waiting for delivery on what has been guided in FY24. some slight miss here & there may be forgiven and strong delivery may make the market believe itâs guidance for FY25 and i think good chance of market maintaining the current multiples. So you can work out the numbers.
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Question is about opportunity cost i was earlier adopter of this stock but now I guess the fizz is over 70 times PE means only EPS growth is there no PE re rating market looks for next 3-5 years they need at least 2000+ cr of new orders to sustain this 70 times PE
Zero debt, 40% opm, cash of 222 crs in book, high growth with no major capex. If the company is able maintain the margin with revenue growth, the story might continue. Awaiting for the Mar earnings & call.
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If company meets Rs 900crs FY25E guidance and maintains FY24 PAT margins we are looking at Rs 275 crs PAT in FY25E. The company is trading at 8526/ 275 = 31.0x P/E FY25E and targetting > 50% growth beyond FY25E. Off course they have orders as of now for this and has next year to wins these orders.
Disclosure: Invested
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On shop floorâŚ
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Good results. YoY 50% jump in sales and 61% jump in profits. QoQ also growth is sales and profit albeit in 25% range.
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Rs 130crs profits in FY24 can go to Rs225-250crs in FY25 if they meet guidance of Rs 900crs in FY25 (up from Rs430crs in FY24) revenues. They have orders to achieve the same.
Order replenishment will happen in H2FY25 post General Elections.
Management guiding Rs1350cr and Rs2000crs revenues in FY26 and FY27
Disclosure: Invested
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Little Disappointed with results.
The P&L was on the expected lines, as per the previous concalls.
However the Cash flow from operations seemed very bad, with inventories and receivables being a drag on balance sheet. Need to see explanation from management.
Disc: Invested
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It is needed for future work deliveryâŚ
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