Zen Technologies

Zen Technologies reported consolidated revenues of ₹178.1 crores for Q4 FY26, broadly in line with Q3 FY26 (₹177.8 crores) but a significant 45.2% decline year-on-year from Q4 FY25 (₹325 crores). Operational EBITDA for the quarter stood at ₹51 crores, translating to a margin of 28.6%, which was lower by approximately 900 basis points sequentially and 1390 basis points year-on-year. Profit after tax for Q4 FY26 was ₹47.2 crores, with a PAT margin of 26.5%.

For the full year FY26, consolidated revenues were ₹687.7 crores, a 29.4% decrease from FY25 (₹973.6 crores). Operational EBITDA for FY26 was ₹247.2 crores, with a margin of 35.95%, lower by 240 basis points YoY. The Q4 margin compression was attributed to a lower revenue base, year-end employee incentives (₹5 crores), increased warranty provisioning for anti-drone systems (₹3.1 crores), post-supply export expenses (₹2.7 crores), and higher R&D investments (₹3.3 crores sequentially). Management stated that the long-term guidance of 35% operational EBITDA and 25% PAT margins remains intact.

As of March 31, 2026, the consolidated order book stood at ₹1336 crores, with the standalone order book at ₹1222.6 crores. The majority of this order book, specifically ₹1000 crores, is scheduled for execution in FY27, primarily in Q2 and Q3. The remaining ₹326 crores represents AMC revenue spread over the contract period. Management expressed high confidence in achieving a cumulative turnover of ₹4000 crores for FY27-28 and expects the order book to reach ₹3000 crores at some point.

Working capital days as of March 31, 2026, were 196 days, a slight increase from 194 days in Q3 FY26, mainly due to higher inventory and advances to suppliers for FY27 projects. However, Days Sales Outstanding (DSO) improved significantly by 42 days, from 161 days in December 2025 to 119 days at FY26 end. The company maintains a strong liquidity position, being debt-free with cash and bank balances aggregating to ₹1308 crores as of March 31, 2026. Management targets a long-term working capital cycle of 140-150 days.

Zen Technologies is launching several advanced products, including the HyperStrike interceptor drone, which costs $10,000, flies at 400 km/h, and has AI-enabled tracking. Production for HyperStrike is expected to start this financial year, with a capacity of 5000 units per shift per month, scalable to 15000. Other launches include Vrishabh, an Unmanned Ground Vehicle (UGV) with a 150kg payload and 85%+ indigenous content, planned for commercial launch in FY27, and 30mm smart ammunition, for which manufacturing is expected to start next year after certification. The company also introduced a cyber security suite and a CIWS gun missile system.

The company highlighted the increasing prominence of anti-drone systems and simulators in recent wars. Their anti-drone system offers hard kill options, wider frequency dominance (70MHz-12GHz), and a 20km radar detection range, positioning it ahead of global competitors. An advanced anti-drone simulator has also been developed. Management noted that the focus on anti-drone systems has almost doubled post the Israel-Iran war, and they expect this segment to be a major contributor to future turnover, with a 55-45 split favoring anti-drone systems in the pipeline.

In FY26, subsidiaries contributed ₹260 crores to consolidated revenue, with ARI (acquired end of FY25) contributing ₹131 crores at a PAT margin of 30.3%, and UTS contributing the remaining with a PAT margin of 26.5%. Other subsidiaries added ₹10 crores. For FY27, UTS and ARI combined are projected to achieve ₹365 crores in revenue, with ARI maintaining 27-30% margins and UTS 30-31% margins. The closing order book for ARI and UTS as of March 31, 2026, was ₹75 crores and ₹35 crores, respectively.