Synopsis:
Zen Technologies reported a weak Q1FY26 with revenue and net profit down 51% and 53% QoQ, respectively. Despite the drop, EBITDA margin improved to 52.17%. Management remains confident about H1 order inflows and long-term growth, supported by strong liquidity, a growing order book, and strategic defence-tech acquisitions.
Shares of a leading defence technology company witnessed a sharp intraday decline after the company reported a significant drop in quarterly revenue and profits. Despite the sharp contraction in topline and bottomline figures, investors noted improvements in operating margins and a robust pipeline of defence orders that could support long-term growth.
Zen Technologies Ltd, which has a market capitalization of Rs 15,242 crore, opened at Rs 1,690.70 and hit an intraday low of Rs 1,690.70, falling over 5% compared to its previous close of Rs 1,779.60. The stock reacted negatively to the company’s Q1FY26 results, which showed a steep decline in topline performance compared to both the previous quarter and the same period last year.
What’s the News?
Zen Technologies posted a subdued Q1FY26 performance with a sharp decline in both revenue and profitability on a sequential and annual basis. Quarter-on-Quarter Performance (Q1FY26 vs Q4FY25), On a sequential basis, Zen Technologies’ revenue dropped 51.4 percent to Rs 158 crore in Q1FY26 from Rs 325 crore in Q4FY25.
Operating profit fell 53.6 percent from Rs 138 crore to Rs 64 crore. Profit before tax declined by 50.6 percent to Rs 76 crore, while net profit shrank 53.5 percent to Rs 53 crore compared to Rs 114 crore in the previous quarter. However, EBITDA margin improved sharply from 50.08 percent to 54.67 percent, reflecting better cost control despite revenue compression.
Year-on-Year Performance (Q1FY26 vs Q1FY25), Compared to the same quarter last year, Zen Technologies saw a 38 percent decline in revenue from Rs 255 crore to Rs 158 crore. Operating profit slipped 42.3 percent from Rs 111 crore to Rs 64 crore. Profit before tax fell 30.9 percent, from Rs 110 crore to Rs 76 crore. Net profit was down 32.9 percent year-on-year from Rs 79 crore to Rs 53 crore. Nonetheless, the company improved its EBITDA margin from 44.95 percent to 54.67 percent.
Also read: Bulk Deal: Stock falls 3% after promoter offloads ₹1,307 Cr worth of shares in the company
Comments from Management
Chairman and MD Ashok Atluri stated, “Despite this temporary moderation, our business fundamentals remain strong. We have successfully maintained our EBITDA and PAT margins, reflecting strong operational discipline and cost efficiency.” He further added, “Our financial position remains robust, with liquidity of ₹918 crores as of June 30, 2025, providing significant flexibility to pursue emerging growth opportunities.”
Atluri emphasized that the company is confident of achieving its H1FY26 order inflow guidance of Rs 800 crore, with Rs 150 crore already secured and Rs 650 crore expected to materialize within the first half. He also highlighted the expansion into UAVs and loitering munitions through the acquisition of TISA Aerospace as part of its long-term strategy.
Operational Highlights
Zen Technologies’ order book stood at Rs 754.56 crore as of June 30, 2025, with Rs 117.41 crore worth of export orders. During the quarter, it executed orders worth Rs 158.22 crore and received new orders worth Rs 64.26 crore. The company completed four strategic acquisitions to expand into defence robotics, naval simulation, and UAV technologies, strengthening its presence across multiple defence verticals.
About the Company
Zen Technologies Limited is a leading Indian defence technology company specializing in state-of-the-art training and anti-drone solutions. With over 1,000 training systems delivered globally and more than 180 patents filed, Zen has a strong R&D foundation backed by the Government of India. It operates from its Hyderabad facility and focuses on building indigenous solutions for modern warfare training.
Written by -Manan Gangwar
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