Zen Tech hits the floor after Q3 PAT tumbles 41% QoQ to Rs 39 cr

Zen Technologies hit a lower circuit of 20% to Rs 1,079.35 after the company's standalone net profit fell 40.8% to Rs 38.62 crore in Q3 FY25 as agaisnt Rs 65.24 crore posted in Q2 FY25.

Revenue from operations dropped 41.4% QoQ to Rs 141.52 crore in the quarter ended 31 Decemmber 2024.

On a year-on-year basis, the company's net profit increased by 21.9%, rising from Rs 31.67 crore in Q3 FY24, while revenue from operations surged by 44.3%, up from Rs 98.08 crore in Q3 FY24.

Profit before tax stood at Rs 53.36 crore in Q3 FY25, registering a growth of 15.8% from Rs 46.06 crore reported in the same period a year ago.

The companys EBITDA increased by 21.2% to Rs 58.69 crore in Q3 FY25, compared to Rs 48.41 crore in Q3 FY24. However, the EBITDA margin decreased to 35.90% in Q3 FY25, down from 47.34% in Q3 FY24.

On nine-month basis, the companys standalone net profit soared 85.1% to Rs 178.03 crore on 116.3% surge in revenue from operations to Rs 637.17 crore in 9M FY25 over 9M FY24.

Ashok Atluri, chairman and managing director, said, I am pleased to provide an update on our Q3FY25 performance, which demonstrates a stable performance, keeping us on track to meet our stated guidance of Rs 900 crore revenues for FY25.

The Union Budget 2025 demonstrates the government's commitment to strengthening the defence sector, with a record allocation of over Rs 6.81 lakh crore for the Ministry of Defence, marking a 9.53% increase from FY25. This includes a substantial Rs 1.80 lakh crore earmarked under the Capital Budget of Armed Forces, providing significant tailwinds for our industry.

Our liquidity remains strong, with Rs 1,028 crores in bank balances as of 31 December 2024. Furthermore, we completed the expansion of our assembly unit at Maheshwaram. This expansion enhances our ability to scale up operations to meet growing demand.

In this quarter, we experienced a rise in profitability due to higher other income; however, we remain confident that we will achieve our EBITDA target of 35% and PAT margins of 25% by the end of the financial year.

Our order book remains robust at Rs 816.91 crore as of December 2024, reflecting a healthy pipeline for the coming quarters. Our strategic focus on securing new contracts and diversifying our portfolio ensures sustained revenue visibility and positions us well for continued growth.

As part of our commitment to innovation and growth, we have made strategic acquisitions in robotics, aerospace, and defence propulsion, further solidifying our position as a leader in cutting-edge technology.

Meanwhile, the company has announced strategic investments in two companies Vector Technics and Bhairav Robotics. These acquisitions reinforce Zens commitment to innovation, indigenous defense manufacturing, and technological advancement in robotics, aerospace, and propulsion systems, further solidifying its position as a key player in Indias defense sector.

With these acquisitions, the company expands beyond combat training into advanced defense technologies, strengthening its ability to deliver integrated solutions for armed forces worldwide. The investments enhance Zens capabilities in UAV propulsion, autonomous robotics, and aerospace components, driving self-reliance in defense manufacturing. These strategic moves also position Zen to compete globally, catering to international markets seeking cutting-edge, Indian-made defense solutions.

Further, the company has announced the acquisition of Applied Research International (ARIPL) and ARI Labs (ALPL), acquiring 100% equity stake in both companies. The acquisition, valued at Rs 130 crore, strengthens Zen Technologies commitment to advancing simulation technologies for defense and security forces.

Zen Technologies is a pioneer and leader in providing world class state-of-theart Defence Training and Anti-Drone solutions and has a proven track record in building training systems for imparting defense training and measuring combat readiness of security forces. With a dedicated R&D (recognized by the Ministry of Science and Technology, Government of India) and production facility in Hyderabad, the company has applied for over 172+ patents and shipped more than 1,000 training systems around the world.

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