Zen Technologies (533339) Q3 24/25 earnings summary

Executive summary

• Revenue and profit growth remained strong in Q3 FY25 and the nine months ended December 2024, with management reaffirming confidence in achieving the INR 900 crore annual revenue target despite some order delays.

• Robust order book of ₹81,691 lakhs as of December 2024, with strong liquidity and recent assembly unit expansion.

• Strategic acquisitions in robotics, aerospace, defence propulsion, and simulation (including ARI and Vector Technics) are expected to create significant synergies and expand the addressable market.

• The company is transitioning from an anti-drone focus to a broader drone and drone ecosystem play, emphasizing indigenous technology and IP creation.

Financial highlights

• Q3 FY25 consolidated revenue was ₹15,220.90 lakhs (₹152.21 crore), up 53% YoY; EBITDA was ₹66.24 crore (38.01% margin); PAT was ₹3,971.88 lakhs (₹39.72 crore), up 30% YoY.

• For the nine months ended December 2024, consolidated revenue was ₹648.67 crore (up 117%), EBITDA ₹269.17 crore, and PAT ₹179.20 crore.

• AMC business contributed ₹10.7 crore in Q3; equipment sales were ₹130.82 crore.

• R&D expenses for Q3 FY25 were ₹8.43 crore, with a rising trend over recent years.

• Other income increased due to interest from funds raised in August 2024, impacting EBITDA margins.

Outlook and guidance

• Management maintains FY25 revenue guidance of ₹900 crore, with any shortfall in FY26 expected to be offset by strong growth in FY27 and FY28.

• Average CAGR of 50% is targeted over the next three years, with optimism for both domestic and export markets.

• FY26 revenue guidance may be revised as order inflows clarify, but long-term growth trajectory remains intact.

• Government's increased defence budget expected to provide industry tailwinds.