Multibagger defence stock hits upper circuit. Do you hold?

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Multibagger stock: Zen Tech shares have hit upper circuit after the news break by the defence company for getting project sanction order from the Indian army. Zen Tech share price today opened upside and went on to hit its 5% upper circuit levels of 205.40 apiece levels. According to stock market experts, this rise in the multibagger stock can be attributed to two major reasons — project sanction order from the Indian army and expected rise in defence expenditure across globe post-Russia-Ukraine crisis. They said that drone manufacturer company’s stock has given breakout at 200 apiece levels and now there can be some more upside in the multibagger stock in upcoming sessions.

Highlighting the reason for rise in Zen Tech share price; Ravi Singhal, Vice Chairman at GCL Securities said, “Zen Tech has recently received project sanction order for design and development of prototype of Integrated Air Defence Combat Simulator (IADCS). This is working as near term sentiment for rise in this multibagger share’s price. Apart from this, after the Russia-Ukraine war, defence expenditure across globe is expected to rise. In such condition, this company is expected to get benefit of such global environment as the Indian government has already announced to become self reliant in defence procurement.”

Ravi Singhal of GCL Securities said that the stock has given fresh breakout at 200 apiece levels and it may give further upside movement in near term.

In its exchange communication yesterday, Zen Tech management informed Indian exchange about the new Indian army order citing, “Zen Technologies Limited has received a PSO from the Indian Army for design and development of prototype of Integrated Air Defence Combat Simulator (IADCS). The prototype is to be made ready for User Trial Readiness Review (UTRR) within a period of 30 weeks.”

On completion of UTRR, an order towards procurement of 16 no’s of IADCS will be issued by the Indian Army for submission of their commercial offer prior to commencement of Field Evaluation Trials. The project will be completed in two phases viz., Prototype Development Phase and Procurement Phase. The equipment is envisaged to facilitate imparting training to gunners at unit level.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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