Z-Tech

Z-Tech reported a strong financial performance for Q3 FY26, with revenue increasing by 74% year-on-year to approximately INR 42 crores. This growth was accompanied by a 58% rise in EBITDA to INR 11.6 crores and a 51% increase in Profit After Tax (PAT) to INR 7.62 crores. The company's basic EPS for Q3 stood at INR 5.31, and for the nine months of FY26, it was INR 11.66. Management reaffirmed its full-year FY26 guidance of INR 150 crores in revenue and INR 40 crores in PAT, anticipating a robust Q4.

The parks business is a key growth driver, with Z-Tech aiming to transition from an EPC-only model to an operator model generating recurring revenue. The company plans to increase its operational parks from 4 at the start of FY26 to over 15 by April 2026, with 7 more parks expected to be ready by March 2026. The Noida Park, a recent opening, has demonstrated strong performance, attracting 50,000-60,000 visitors monthly and generating INR 80 lakhs to 1 crore in revenue. For FY27, the parks business is projected to achieve approximately INR 200 crores in revenue, with EPC contributing over INR 125 crores.

The Terra vertical experienced significant growth in Q3, with revenue nearly quadrupling year-on-year. This was driven by increased management bandwidth and a strategic expansion into new areas like flood mitigation and mining stabilization, moving beyond traditional roads and bridges. While this shift in project mix temporarily led to lower margins in Q3, management expects this to normalize as they build references and execute these broader projects, which typically command EBITDA margins of 15-20%.

Z-Tech's Agua vertical, focused on sustainable water management, is benefiting from past acquisitions in sewage treatment and recycling. The segment's current order book is around INR 15 crores, and management projects a 2-3x revenue growth for the next year. The company caters to industries like chlor-alkali and nutraceuticals for chemical recovery from affluent streams, and the government sector for sewage recycling. The acquired technology for water body rejuvenation has been successfully showcased in Noida Park.

The company's total order book stood at approximately INR 230-240 crores as of Q3 FY26, with a target to reach INR 300 crores by the end of FY26. New orders worth INR 35 crores have been secured and are awaiting formal announcement. The creative park segment currently has INR 76 crores remaining in its order book, with a target of INR 125-150 crores by FY26 end. Z-Tech is also actively exploring international expansion, with inquiries from 15 countries and an Expression of Interest for a park in Ghana, though no new acquisitions are planned for the next six months.

Z-Tech has encountered operational challenges, particularly with delays in formal park inaugurations due to VIP availability, which can push back revenue generation. To mitigate this, the company is now focusing on soft launches to operationalize parks faster, as demonstrated by the Pimpri-Chinchwad park. Management also addressed concerns about high receivables, clarifying that these are primarily due to the nature of operationalizing parks and ensuring their completion before full revenue realization.