Oracle, Zen Tech, Praj Industries: Why have the shares fallen up to 63% this year?
Synopsis: Shares of Oracle Financial Services Software, Zen Technologies, and Praj Industries have fallen sharply this year, down between 42–63%, driven by stretched valuations, slowing revenue growth, weak order momentum, and investor profit booking, despite healthy three-year CAGR and strong financial metrics. This year has seen significant movements in the stock market, with companies like […]
The post Oracle, Zen Tech, Praj Industries: Why have the shares fallen up to 63% this year? appeared first on Trade Brains.
Synopsis: Shares of Oracle Financial Services Software, Zen Technologies, and Praj Industries have fallen sharply this year, down between 42–63%, driven by stretched valuations, slowing revenue growth, weak order momentum, and investor profit booking, despite healthy three-year CAGR and strong financial metrics.
This year has seen significant movements in the stock market, with companies like Oracle Financial Services Software, Zen Technologies, and Praj Industries experiencing notable changes in their share prices. These companies, recognized for their presence in IT, defense, and industrial sectors, drawing focus from both the market and analysts.
Zen Technologies Limited, founded in 1993 and based in Hyderabad, designs, develops, manufactures, and sells training simulators in India and internationally. The company offers a wide range of products including anti-drone systems, live firing and tactical training simulators, weapon and driving simulators, and training systems for infantry, artillery, and air defense. Its solutions cater to police, paramilitary and armed forces, government departments, and civilian markets.
Zen Technologies Limited, with a market capitalization of Rs. 12,244.28 crore, is trading at Rs. 1,356.10 per equity share, up by 0.25 percent from its previous day’s close price of Rs. 1,352.90 per equity share. On 1 January 2025, the share was at Rs. 2,515, which represents a decline of 48.38 percent compared to the current market price.
Possible Reason for Shares Falling
Zen Technologies Limited’s stock might have fallen this year due to valuation concerns, as it was trading at a P/E of 104x as of 24/12/24, which might be considered high, making investors cautious. The company’s quarterly performance shows revenue declined from Rs. 325 cr in Q4FY25 to Rs. 158 cr in Q1FY26 and Rs. 174 cr in Q2FY26, while order inflows this year have been lower compared to the previous year, raising concerns about future growth.
Additionally, the stock rose from Rs. 781 on 29/12/23 to a high of Rs. 2,627 on 24/12/24, implying an upside of 236.6 percent, so profit booking by investors may also have contributed to the decline.
Financial Outlook
Zen Technologies reported Q2FY26 revenue of Rs. 174 crore, down 28 percent YoY from Rs. 242 crore in Q2FY25, but up 10 percent QoQ from Rs. 158 crore in Q1FY26. EBITDA stood at Rs. 65 crore, down 19 percent YoY from Rs. 80 crore, and slightly up 1.6 percent QoQ from Rs. 64 crore. The company posted a net profit of Rs. 62 crore, down 1.6 percent YoY from Rs. 63 crore, but up 17 percent QoQ from Rs. 53 crore, reflecting stable profitability despite lower revenues.
Over the past three years, the company has delivered a revenue CAGR of 141 percent, a profit CAGR of 411 percent. A return on equity (ROE) of about 26.1 percent and return on capital employed (ROCE) of about 37.2 percent, demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 49.6x lower as compared to its industry P/E 61.4x.
Praj Industries Limited
Praj Industries Limited, founded in 1985 and headquartered in Pune, operates in bio-based technologies and engineering in India and globally. The company provides solutions for ethanol and renewable fuels, biopharma processing, brewing and beverages, hydrocarbon and chemical industries, and wastewater treatment, offering plant engineering, equipment, modular process packages, and sustainability-focused services such as recycling, zero liquid discharge, and resource recovery.
Praj Industries Limited, with a market capitalization of Rs. 5,916.02 crore, is trading at Rs. 321.80 per equity share, up by 1.12 percent from its previous day’s close price of Rs. 318.25 per equity share. As of 1 January 2025, the share price reached a high of Rs. 875, which represents a decline of 63.22 percent compared to the current market price.
Possible Reason for Shares Falling
Praj Industries Limited’s shares are falling mainly because earnings and order momentum have weakened. After India achieved the 20 percent ethanol blending target, new ethanol plant investments slowed due to excess capacity and no fresh blending mandate, leading to fewer new orders. This hurt financial performance, with revenue falling from Rs. 860 cr in Q4FY25 to Rs. 640 cr in Q1FY26 and net profit dropping sharply from Rs. 54 cr to Rs. 5 cr, showing strong margin pressure; although revenue improved in Q2FY26, profits remained low.
In addition, order inflows moderated, project execution slowed due to funding issues at client sites, global uncertainty delayed capex decisions, and foreign investors reduced their holdings, all of which together have kept investor sentiment weak and pushed the stock lower.
Financial Outlook
Praj Industries reported revenue of Rs. 842 crore in Q2FY26, up 3.2 percent YoY from Rs. 816 crore in Q2FY25 and higher by a strong 31.6 percent QoQ from Rs. 640 crore in Q1FY26. EBITDA fell to Rs. 56 crore, down 34.9 percent YoY from Rs. 86 crore, but improved sharply 80.6 percent QoQ from Rs. 31 crore in Q1FY26. Net profit stood at Rs. 19 crore, declining 64.8 percent YoY from Rs. 54 crore, though it rose significantly 280 percent QoQ from Rs. 5 crore, indicating improving margins sequentially despite weak year-on-year performance.
Over the past three years, the company has delivered a revenue CAGR of 11 percent, a profit CAGR of 9 percent. A return on equity (ROE) of about 14.1 percent and return on capital employed (ROCE) of about 17.9 percent, demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 56x higher as compared to its industry P/E 32.9x.
Founded in 1989, Oracle Financial Services Software Limited (OFSS), based in Mumbai and a subsidiary of Oracle Global, provides IT solutions and consulting for the global financial services industry. Its products include banking software like Oracle FLEXCUBE, digital banking, lending, payments, treasury, risk, and compliance solutions, along with cloud, data management, and bancassurance services.
Oracle Financial Services Software Ltd, with a market capitalization of Rs. 66,420.00 crore, is trading at Rs. 7,633 per equity share, up by 0.09 percent from its previous day’s close price of Rs. 7,626.50 per equity share. On 1 January 2025, the share price was at Rs. 12,879.95, which represents a decline of 42.26 percent compared to the current market price.
Possible Reason for Shares falling
Oracle Financial Services Software (OFSS) stock might have fallen this year due to valuation concerns, as it was trading at a P/E of 45x as of 30/12/24, which may be considered high, potentially making investors cautious. The IT sector is also not booming, and broader indices like Nifty IT have fallen by 13.2 percent in the past year, reflecting weaker market sentiment. Additionally, OFSS itself rose from 29/12/23 at Rs. 4175.15 to a high of Rs. 13,220 as on 30/12/24, implying an upside of 216.5 percent, so profit booking by investors may also be a contributing factor to the decline.
Financial Outlook
In Q2FY26, the company reported revenue of Rs. 1,789 cr, up 6.9 percent YoY from Rs. 1,674 cr in Q2FY25, but down 3.4 percent QoQ from Rs. 1,852 cr in Q1FY26. EBITDA was Rs. 755 cr, up 0.5 percent YoY from Rs. 751 cr, but down 10.7 percent QoQ from Rs. 846 cr, reflecting pressure on operational margins. Profit stood at Rs. 546 cr, down 5.5 percent YoY from Rs. 578 cr and down 14.9 percent QoQ from Rs. 642 cr in Q1FY26.
Over the past three years, the company has delivered a revenue CAGR of 9 percent, a profit CAGR of 8 percent. A return on equity (ROE) of about 29.3 percent and return on capital employed (ROCE) of about 40.6 percent, demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 28x lower as compared to its industry P/E 34.7x.
Conclusion
Oracle Financial Services Software, Zen Technologies, and Praj Industries were once market favourites due to strong growth expectations and high future expectations. Over the past year, their share prices have fallen sharply as business conditions weakened, earnings fell short of expectations, and new order flow slowed. With sector momentum cooling and valuations looking expensive, investors became cautious and booked profits, resulting in sharp corrections in all three stocks.
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