BOB Capital Markets has initiated 'Buy' on Zen Technologies with price target of Rs 117 with upside potential of 45%.

Commenting on the investment rationale, the stock broker said, ''We expect Zen's revenue and earnings to grow at a CAGR of ~38% and 41% respectively over FY15-18e led by existing order book of Rs 1.1 billion; proposed orders from Indian armed and paramilitary forces of ~ Rs 5 billion in near future;  increasing export opportunities and Zen may capture a substantial portion of the expected Rs 60 billion market.

At CMP of Rs 81, the stock trades at PE of 26.3x/17.3x/13.5x of FY16/17/18e respectively. We initiate the stock with the Buy rating and a target price of Rs 117 (25x of FY17e; which is in line with its 1 year average of ~25x but at a premium to 3years average multiple of ~12x; as we expect existing order book of Rs 1.1bn and proposed orders of ~5-7.5bn from Government of India will take ZEN to different orbit).'' 

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