1. At a Glance
Zen Technologies just pulled a “high budget action sequel” with Q1 FY26 results – revenues halved QoQ, profits plunged 54%, and yet the market cap is still flexing at ₹16,000 Cr. Anti-drone tech is sexy, but investors just got drone-striked on the price chart.
2. Introduction with Hook
Imagine Iron Man forgetting to charge his suit mid-battle. That’s Zen’s Q1. After a blockbuster FY25, the latest quarter was a hangover – sales fell to ₹158 Cr (down 37.8% YoY), and PAT nose-dived to ₹53 Cr from ₹114 Cr last quarter. Yet, this Hyderabad-based war gadget maker remains India’s poster child for defense-tech swag.
3. Business Model (WTF Do They Even Do?)
Zen builds military simulators, counter-drone systems, and training tech so soldiers can practice without blowing up real stuff. Basically, they make video games for the army – except the stakes are higher, and the graphics budget is in crores.
4. Financials Overview
- Revenue (Q1 FY26): ₹158 Cr (YoY -37.8%)
- EBITDA: ₹64 Cr (EBITDA margin 41%)
- PAT: ₹53 Cr (YoY -32.9%)
- 5-year CAGR: Sales +46%, PAT +37%
Margins are still hotter than HAL’s jet engines (41%), but revenue’s fall is like a parachute that failed to open.
5. Valuation
Using a generous P/E of 60x FY25 EPS (₹31) gives a fair value around ₹1,550–₹1,700.
EV/EBITDA at 35x? That’s like paying for Maggi at an airport lounge – overcooked.
6. What’s Cooking – News, Triggers, Drama
- Acquisition of TISA Aerospace (76% stake) completed for ₹6.5 Cr – a pocket-sized deal but adds UAV integration capabilities.
- Promoter reclassification drama: One of the promoters wants to be “just friends” (moving to public category).
- Defense orders pipeline is strong but lumpy. Expect contract announcements as election season brings budget love.
7. Balance Sheet
| ₹ Cr | Mar 2024 | Mar 2025 |
|---|---|---|
| Assets | 750 | 2,049 |
| Net Worth | 448 | 1,701 |
| Debt | 6 | 61 |
Debt is manageable. Net worth skyrocketed thanks to profit retention and revaluation – not Titanic yet, but keep an eye.
8. Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | 116 | 13 | -146 |
| CFI | -4 | -85 | -823 |
| CFF | -22 | -3 | 1,007 |
Cash flow looks like your freelancer friend – spends first, invoices later. Heavy outflows in FY25 due to expansion.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 26% |
| ROCE | 37% |
| P/E | 64x |
| D/E | 0.04 |
| PAT M% | 38% |
ROCE is spicier than Twitter during a defense budget leak. D/E almost zero – a debt-free flex.
10. P&L Breakdown – Show Me the Money
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 219 | 440 | 974 |
| EBITDA | 73 | 181 | 373 |
| PAT | 50 | 130 | 299 |
PAT tripled in two years, but Q1 shows cracks. Hype needs revenue backup.
11. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| HAL | 30,981 | 8,360 | 36x |
| BEL | 23,769 | 5,321 | 54x |
| Data Patterns | 708 | 215 | 70x |
| Zen Technologies | 877 | 273 | 64x |
Zen is the “cool startup” among stodgy defense PSUs – high growth, high multiple, and high drama.
12. Miscellaneous – Shareholding, Promoters
Promoter stake dropped from 60% (2022) to 49% (2025). FIIs & DIIs scooped up shares – smart money loves drones. Promoter exit drama (0.55% stake) is minor but keeps gossip mills running.
13. EduInvesting Verdict™
Zen Technologies is the flashy defense tech hero with swagger. But Q1 FY26 reminds us: orders are lumpy, cash flow shaky, and valuation hotter than HAL’s afterburner. Great story to track – but buckle up, turbulence ahead.
Written by EduInvesting Team | 26 July 2025
Tags: Zen Technologies, Defense Stocks, Anti-Drone Systems, Q1 FY26 Results, EduInvesting Premium, Aerospace & Defense, Indian Defense, Stock Analysis
