This drone stock zoomed 45% in just three days. Here’s all you need to know
According to leading data and consulting firm Grand View Research, the global drone market is projected to witness a remarkable compound annual growth rate of 38.6% from 2023 to 2030.
This surge indicates the undeniable potential for capitalizing on this emerging field. Enterprise drones are swiftly making their mark across diverse business sectors, including real estate, emergency response, and military security and defence.
As these remarkable machines continue to reshape the way we work, the idea of investing in drone stocks has attracted significant attention.
One such drone company, in particular, has gained significant investor’s attention by surging over 45% in the past three days. The company is none other than Zen Technologies.
Shares of the company jumped 13.3% intraday to hit a fresh 52-week high on 13 July 2023.
Here’s why the stock is up.
Back-to-back order wins
Zen Technologies achieved a major milestone on 11 July 2023 by securing a significant export order valued at approximately ₹3.4 billion (bn) (around US$ 41.5 million).
This success comes shortly after the company’s announcement on 6 July, where it won a ₹1.6 bn order from the Government of India.
The recent order from the export markets aligns with the government’s Indigenous Design and Development (IDDM) plan, which emphasizes the use of Indian intellectual property and a minimum of 60% domestically manufactured content.
Zen Technologies stood out as the sole vendor meeting these strict criteria, further establishing its position in the industry.
As a result of these consecutive wins, Zen Technologies’ shares experienced a significant upswing in the market.
Strong growth prospects
Going forward, the management foresees significant order wins in the future, driven by their active participation in various defence events. Additionally, they anticipate securing more substantial orders due to the Indian government’s aggressive procurement activities.
A major catalyst for this growth is the government’s recent policy liberalization, which allows for the global export of drones categorized for civilian use.
Previously restricted under the SCOMET list, these drones can now be sold worldwide, opening up vast international markets and boosting the company’s potential for expansion.
Furthermore, the recent disbursement of ₹300 million (m) as a PLI for drones and drone components is a game-changer for the industry.
This scheme offers a 20% incentive based on value addition, making it one of the most generous PLI schemes to stimulate the industry.
Furthermore, the rising demand for drones across various industries further fuels this upward trajectory. The government’s steadfast support positions India as a global hub for drone manufacturing and innovation, creating a fertile environment for the company’s sustained success and robust growth.
How Zen Tech shares have performed recently
Zen Tech shares have given multibagger return over 219.3% in 2023. Over the month, the company’s shares have rallied over 45%.
Zen Tech touched its 52-week high of ₹654.9 on 13 July 2023 while it touched a 52-week low of ₹167.3 on 15 July 2022.
Zen Tech Share Price – 1 Month
View Full Image
About Zen Tech
Zen Technologies is a leading provider of military training and anti-drone solutions. The company was founded in 1993 and is headquartered in Hyderabad, India.
Zen is at the forefront of applying new technologies and developing new products. It is actively involved in the indigenization of technologies, which is beneficial to the Indian Security Forces.
It was the first Indian company to commercialize PC-based visual simulation technology for training simulators. Now, Zen is the leader, offering Firearms, Tank, Driving, Mining and Unmanned Aerial Vehicle (UAV) simulators.
The firm offers its products to police and paramilitary forces, armed forces, security forces, and government departments, such as transport, mining, infrastructure, and civilian markets.
Disclaimer:This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
