Zen Technologies (533339) Q2 24/25 earnings summary

Executive summary

• H1 FY25 consolidated revenue reached ₹496.46 crore, up 150% YoY, with PAT at ₹139.48 crore, surpassing FY24 figures and reflecting robust growth momentum.

• Achieved INR 500 crore revenue in H1 FY25, on track to exceed INR 900 crore full-year guidance, with strong execution and robust order pipeline expected to drive growth in H2.

• Order book as of September 30, 2024, stands at ₹956.74 crore, supporting future growth prospects.

• Completed a ₹1,000 crore Qualified Institutional Placement (QIP), significantly strengthening liquidity and attracting marquee investors.

• Focused on maintaining leadership in training/simulation and anti-drone systems, with significant R&D investments and product advancements, including two generations of improvement since 2021.

Financial highlights

• H1 FY25 consolidated revenue: ₹496.46 crore (up 150% YoY); operational EBITDA: ₹191.35 crore (up 118% YoY); PAT: ₹139.48 crore (up 124% YoY).

• Operational EBITDA margin for H1 FY25 at 36.8%, above 35% guidance; PAT margin at 28%.

• Gross margin for H1 FY25 was 50%, lower due to higher R&D allocation and evolving product mix, but operational leverage helped maintain profitability.

• Export revenue expected to increase in H2, supporting higher margins.

• Basic and diluted EPS for H1 FY25 were ₹16.42, up from previous year.

Outlook and guidance

• FY25 revenue guidance maintained at INR 900 crore, with management confident of exceeding this target.

• Projecting 50% CAGR over the next three years, driven by a strong order pipeline and new market entries.

• Order inflow of INR 1,200 crore expected by year-end, with major orders anticipated in Q4.

• FY26 order book expected to surpass INR 2,000 crore, supporting continued high growth.

• Actively evaluating acquisition opportunities in simulator and electronic warfare technologies.