This Defence stock dealing in the business of designs develop and manufacturing combat training solutions and Counter-drone solutions for defence and security forces, sticks to its FY25 revenue guidance and expects to grow at a CAGR of 50 percent over the 3-year average.
Price Movement
Zen Technologies Limited’s stock in Friday’s trading session closed at Rs. 1,113.70 and was down by 2.17 percent from its previous closing price of Rs. 1,113.70. The stock has delivered a return of 35 percent compared to the Nifty Index, it has outperformed.
Guidance & Future Plans
The company sticks to its FY25 revenue guidance of Rs. 900 crore with a 35 percent EBITDA margin. The top line is expected to grow at an average CAGR of 50 percent for the next three years.
The Qualified Institutional Placements (QIP) were done for the acquisitions and working capital needs. The promoter stake fell due to equity dilution which was caused by QIP in August previous year. The working capital days are expected to be approximately 200 days.
The recent acquisitions involve ARI Labs (ARIL) in the business of Simulation & Applied Research International Private Limited (ARIPL) in Marine Simulation totalling Rs. 130 crores.
Further, Vector Technics, a recent strategic acquisition of 51 percent has developed extraordinary IP and they plan to export it to North America. The order worth Rs. 800 crores is expected to be finalized by Q1FY26.
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Financial Performance
Their Q3FY25 results show revenue from operations of Rs. 152 crore which increased by 52 percent year on year, from Rs. 100 crore in Q3FY24. Its net profit increased by 43.33 percent year on year, from Rs. 30 crores in Q3FY24 to Rs. 43 crores in Q3FY25.
Business Segments & Order Book Analysis
The company recognizes its revenue from operations under Defence and Homeland as of the December 2024 quarter.
The order book as of Q3FY25 stood at Rs. 816.91 crores comprising Rs. 279.68 crore from the Annual Maintenance Contract (AMC) and Rs. 537.23 crore from Equipment.
Geographically, their domestic order book value is around Rs. 492.50 crore, and export stands at Rs. 324.41 crore.
Their product-wise order book both domestic and export includes Training Simulators which stands at Rs. 395.75 crores and Anti-Drone Systems at Rs. 421.16 crores.
Company Overview
Zen Technologies was founded in 1993 and they are involved in designing, developing, and manufacturing combat training solutions and counter-drone systems for defence and security forces worldwide. It offers a portfolio of over 40 indigenous products and has over 1,000 simulators deployed globally.
Written by Santhosh S
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