Zen Technologies in Freefall: 60% Stock Crash in 2 Months, 8-Month Low Amid Q3 Earnings Disaster!

Zen Technologies’ stock dropped 60% in two months, hitting an eight-month low of ₹976 after disappointing Q3 earnings, with a decline in order book and shrinking profit margins. Despite a 53% YoY revenue increase to ₹152.21 crore, profit margins weakened due to higher operating expenses. ICICI Securities maintained a ‘buy’ rating but lowered the target price from ₹2,535 to ₹1,970. The company is positioning itself for growth through investments in advanced defense technologies, capitalizing on India’s increasing defense budget.

CONTENTS:

• Zen Technologies Stock Plunges 10% Amid Weak Q3 Earnings, Falls 33% in Three Days
• Zen Technologies Stock Falls 10%, Drops 33% in Three Days Amid Weak Q3 Earnings
• Zen Technologies Stock Drops 60% in Two Months, Hits 8-Month Low Amid Weak Q3 Earnings

Zen Technologies in Freefall: 60% Stock Crash in 2 Months, 8-Month Low Amid Q3 Earnings Disaster!

Zen Technologies Stock Plunges 10% Amid Weak Q3 Earnings, Falls 33% in Three Days

Zen Technologies’ stock continued its downward trend for the third consecutive session, plunging 10% in today’s trading and registering a 33% decline over the last three days. The sharp fall followed the company’s weak Q3 earnings report, which showed a sequential decline due to delays in booking certain contracts and a shift in revenue recognition to Q4.

As of 9:53 AM, Zen Tech shares were trading at ₹976.90 on the NSE.

Although the drone manufacturer posted year-on-year growth in Q3, investors reacted negatively to the sequential decline in performance. Brokerage firm Motilal Oswal Financial Services (MOFSL) highlighted concerns over growth visibility, order inflows, and acquisition plans, contributing to the stock’s underperformance compared to broader indices.

Zen Technologies reported a net profit of ₹38.62 crore in Q3, marking a 22% increase from ₹31.67 crore in the same period last year, driven by higher other income. However, on a sequential basis, net profit nearly halved from ₹65.24 crore in the previous quarter.

Revenue surged 44% year-on-year to ₹141.52 crore, compared to ₹98.08 crore, but saw a significant 41% decline from ₹241.69 crore in the September quarter due to shipment delays and deferred revenue recognition.

EBITDA margins stood at 35.90%, down from 47.34% in the previous year but slightly up from 35.12% in the preceding quarter.

Looking forward, Zen Technologies expects order inflows of ₹800 crore in Q4-FY26, providing revenue visibility beyond FY25. Despite the Q3 revenue miss, the company maintains its revenue guidance of ₹900 crore for FY25, with a target EBITDA margin of 35%.

The company is also expanding its portfolio through acquisitions and partnerships, including its recent purchase of ARIPL, a naval simulator firm, and collaborations for air-based simulation solutions.

However, due to weaker-than-expected order inflows this fiscal year, MOFSL has revised its earnings estimates downward by 4% for FY25, 25% for FY26, and 22% for FY27. The brokerage also lowered Zen Tech’s valuation multiple, citing weaker growth prospects until FY26.

That said, MOFSL anticipates a rebound beyond FY26, driven by large-scale simulator orders, recent acquisitions, and expansion into simulators, anti-drone technology, and other new segments. However, the brokerage cautioned that delays in finalizing tenders could continue to impact execution in the short to medium term.

Zen Technologies Stock Falls 10%, Drops 33% in Three Days Amid Weak Q3 Earnings

Zen Technologies’ stock continued its downward trend for the third straight session, plunging another 10% today and registering a total decline of 33% over the past three days. The sharp drop follows the company’s weak Q3 earnings report, which showed a sequential decline due to delays in contract bookings and a shift in revenue recognition to Q4.

As of 9:53 AM, Zen Tech shares were trading at ₹976.90 on the NSE.

Although the drone manufacturer recorded year-over-year growth in Q3, investors reacted negatively to the sequential decline. Brokerage firm Motilal Oswal Financial Services (MOFSL) highlighted concerns over order inflows, acquisition strategies, and overall growth visibility, contributing to the stock’s underperformance relative to broader market indices.

For Q3, Zen Technologies reported a net profit of ₹38.62 crore, reflecting a 22% increase from ₹31.67 crore in the same period last year, driven by a rise in other income. However, on a quarter-over-quarter basis, net profit nearly halved from ₹65.24 crore in the previous quarter.

Revenue rose 44% year-over-year to ₹141.52 crore, compared to ₹98.08 crore, but saw a 41% drop from ₹241.69 crore in the September quarter due to shipment delays and postponed revenue booking.

EBITDA margins came in at 35.90%, down from 47.34% a year ago, but slightly improving from 35.12% in the previous quarter.

Looking ahead, Zen Technologies expects order inflows of ₹800 crore in Q4-FY26, ensuring revenue visibility beyond FY25. Despite the revenue shortfall in Q3, the company maintains its FY25 revenue forecast of ₹900 crore and aims for an EBITDA margin of 35%.

The company is also broadening its portfolio with new acquisitions and partnerships, including the recent purchase of ARIPL, a naval simulator company, and collaborations for air-based simulation technologies.

However, due to weaker-than-expected order inflows so far this fiscal year, MOFSL has revised its earnings estimates downward by 4% for FY25, 25% for FY26, and 22% for FY27. The brokerage also lowered Zen Tech’s valuation multiple, citing weaker growth prospects until FY26.

That said, MOFSL anticipates a recovery beyond FY26, supported by large-scale simulator orders, recent acquisitions, and expansion into simulators, anti-drone technology, and other advanced sectors. However, it cautioned that delays in tender finalizations could continue to impact execution in the short to medium term.

Zen Technologies Stock Drops 60% in Two Months, Hits 8-Month Low Amid Weak Q3 Earnings

Zen Technologies’ stock extended its decline for a third consecutive session on February 18, plunging another 10% to hit an eight-month low of ₹976 per share. The stock has now dropped 60% in less than two months, falling from ₹2,445 to its current level.

In the previous session, the stock hit its 20% lower circuit limit after the company’s Q3 earnings report disappointed investors. A decline in its order book and shrinking profit margins weighed on sentiment, causing the once high-performing stock to reach multi-month lows.

Despite the weak results, domestic brokerage firm ICICI Securities maintained a ‘buy’ rating but revised its target price downward from ₹2,535 to ₹1,970 per share.

Zen Technologies reported revenue of ₹152.21 crore in Q3FY25, marking a 53% year-over-year (YoY) increase, while EBITDA rose to ₹66.24 crore from ₹46.73 crore. However, profit margins weakened, falling to 38% from 45% in the same quarter last year due to a significant rise in operating expenses.

A substantial jump in other income helped boost net profit, which increased 30% YoY to ₹39.72 crore. However, profit margins fell to 22% in Q3FY25, compared to 29% in Q3FY24.

The company’s order book declined, standing at ₹816 crore in December, down from ₹956 crore at the end of the previous quarter. During Q3FY25, the company secured new orders worth ₹1.69 crore, all related to Annual Maintenance Contracts (AMC), while no new equipment orders were recorded.

In contrast, during Q2FY25, the company had secured ₹668 crore in new orders, including ₹288 crore in AMCs, according to its earnings report.

Looking ahead, Zen Technologies is well-positioned to benefit from India’s increasing defense budget. The Union Budget 2025 has allocated ₹6.81 lakh crore to the Ministry of Defense, reflecting a 9.53% increase from FY25. Of this, ₹1.80 lakh crore has been earmarked for capital expenditure on the armed forces, providing strong growth opportunities for the sector.

Additionally, Zen Technologies has announced strategic investments in Vector Technics Private Limited and Bhairav Robotics Private Limited, expanding its focus beyond combat training into advanced defense technologies. These acquisitions enhance the company’s capabilities in UAV propulsion, autonomous robotics, and aerospace components, reinforcing its position in defense manufacturing and increasing its competitiveness in global markets.

Despite the recent 60% correction, Zen Technologies‘ stock remains up 315% over the past two years and has surged 1,700% over the last five years.