Zen Technologies (533339) Q1 26/27 earnings summary

Executive summary

• Q1 FY27 consolidated revenue was INR 141.6 crore, down from INR 178.1 crore in Q4 FY26 and INR 158.2 crore in Q1 FY26, reflecting early-stage execution of a robust order book and in line with expectations.

• Revenue is expected to be weighted towards Q2 and Q3 as order book execution ramps up, with majority of revenue conversion from Q2 FY27 onward.

• Operational EBITDA for Q1 FY27 was INR 38.7 crore (27.3% margin), with PAT at INR 34.5 crore (24.3% margin), including a one-off exceptional loss of INR 3.4 crore from a fire incident.

• Adjusted PAT would have been INR 37 crore (26.1% margin) excluding the exceptional loss.

• New product launches included AI-powered anti-drone systems, interceptor drones, unmanned ground vehicles, and integrated border solutions.

Financial highlights

• Gross margin for Q1 FY27 was 72.9%, stable both sequentially and year-over-year.

• EBITDA margin compressed due to negative operating leverage from a lower revenue base and fixed costs; Q1 FY27 EBITDA margin was 40.9%, down from 54.7% in Q1 FY26.

• Q1 FY26 margins were boosted by a one-time provision release of INR 7.65 crore, while Q1 FY27 saw increased warranty provisions (INR 2.88 crore) and R&D costs (INR 4.25 crore).

• Working capital cycle increased to 257 days, mainly due to advances to suppliers and inventory buildup for order execution.

• Cash and bank balances stood at INR 1,217 crore as of June 30, 2026; the group remains debt-free.

Outlook and guidance

• Margins are expected to recover as revenue scales, with full-year operational EBITDA margin guidance in the mid-30s.

• Order book as of June 30, 2026, stood at INR 1,239.02 crore, with an additional INR 177.5 crore simulator order received in July 2026.

• Cumulative revenue target of INR 4,000 crore for FY27 and FY28, with significant contributions expected from anti-drone and simulator segments.

• Positive procurement environment driven by government prioritization of counter-drone systems and indigenous defense solutions.