When Zen Technologies’ quarterly earnings were disappointing, the company’s shares dropped 10% to ₹976, an eight-month low. Profit margins decreased due to growing expenses, even though sales increased by 53%. Although the company’s order book decreased, it acquired fresh orders.
Today, February 8, shares of Zen Technologies, a leader in defense simulation and anti-drone technology, fell 10% for the third session, reaching an 8-month low of ₹976 per share.
The stock hit the 20% lower circuit limit during the last trading session because investors were not impressed by the company’s December quarter results. The once-high-flying stock fell to multi-month lows due to a decline in its order book and a decrease in core profit margins, which damaged investor confidence.
The local brokerage company ICICI Securities maintained its “purchase” recommendation on the stock. Still, they reduced its target price from ₹2535 to ₹1970 per share in response to the poor results.
EBITDA increased to ₹66.24 crore from ₹46.73 crore, while the company’s operating revenue for the December quarter (QFY25) was ₹152.21 crore, representing a 53% YoY growth. However, due to the significant increase in operational expenditures, margins fell to 38% from 45% during the previous year.
Profit margins decreased to 22% in Q3FY25 from 29% in Q3FY24, while net profit increased by 30% YoY to ₹39.72 crore due to a notable increase in other income.
During the quarter, the order book decreased; as of December, it was worth ₹816 crore, down from ₹956 crore at the end of the second quarter. No new equipment orders were received during Q3FY25, but fresh orders of ₹1.69 crore were obtained, of which ₹1.69 crore was credited to AMC.
According to the company’s results statement, it obtained new orders of ₹668 crore in the second quarter of the current fiscal year, including ₹288 crore in Annual Maintenance Contracts (AMC).
The business is in a strong position in the long run, given the Indian government’s increased defense expenditures. With a record allocation of nearly ₹6.81 lakh crore for the Ministry of Defense, a 9.53% increase over FY25, the Union Budget 2025 highlights the government’s commitment to bolstering the defense industry.
This includes a lsignificant₹1.80 lakh crore set up in the capital budget for the military, which would significantly boost the sector. Concurrently, the business has strategically invested in Vector Technics Private Limited and Bhairav Robotics Private Limited. Through these purchases, the company broadens its scope beyond combat training to include cutting-edge defense technology, enhancing its capacity to provide comprehensive solutions to armed forces throughout the globe.
According to the corporation, these investments boost its capabilities in autonomous robots, aerospace components, and UAV propulsion, promoting self-reliance in military production. The purchases also put the business in a position to compete internationally by serving foreign markets looking for state-of-the-art defense products manufactured in India.
In less than two months, the company’s shares have dropped 60%, from ₹2445 per to the current trading price of ₹972. Despite this significant pullback, the stock has increased 315% over the past two years and 1700% over the last five years.
