Zen Technologies sees 44% revenue growth in Q3 FY25, bolstered by strong order book

Zen Technologies Limited, a leading provider of defense technology solutions and anti-drone systems, has reported a strong financial performance for Q3 FY25, underscoring its continued expansion in the defense sector. The company’s revenue for the quarter reached ₹141.52 crore, reflecting a 44% year-over-year (YoY) increase, driven by strong order execution and increasing demand for advanced military technologies. Net profit for the quarter rose 22% YoY to ₹38.62 crore, while EBITDA surged 21% YoY to ₹58.69 crore, maintaining an EBITDA margin of 35.9%, reinforcing the company’s operational efficiency and profitability.

For the nine-month period ending December 31, 2024, the company recorded a 116% YoY growth in revenue, reaching ₹637.17 crore. This significant increase was primarily fueled by heightened demand for defense technology solutions, including combat training simulators, UAV propulsion systems, and anti-drone technology. Net profit for 9M FY25 climbed 85% YoY to ₹178.03 crore, while EBITDA for the period totaled ₹252.77 crore, representing a 76% YoY growth.

Zen Technologies’ financial health remains strong, supported by a robust order book of ₹816.91 crore as of December 2024. This solid pipeline ensures continued revenue visibility for upcoming quarters. Additionally, the company maintains a strong liquidity position, with ₹1,028 crore in bank balances, providing it with the financial flexibility to invest in expansion and innovation.

What Impact Does the 2025 Union Budget Have on Zen Technologies?

The Union Budget 2025 has reinforced the Indian government’s commitment to defense modernization, with an unprecedented ₹6.81 lakh crore allocation for the Ministry of Defence. This represents a 9.53% increase from the previous fiscal year, underscoring the country’s growing focus on strengthening its defense capabilities. A key highlight of this budget is the ₹1.80 lakh crore earmarked for capital expenditure, which will play a crucial role in expanding procurement and innovation within the defense sector.

For companies specializing in defense technology solutions, such as Zen Technologies, this budget allocation presents significant growth opportunities. With the government prioritizing indigenization, military modernization, and next-generation warfare systems, the company is well-positioned to leverage emerging defense contracts and capitalize on increased demand for UAV propulsion systems, combat robotics, and advanced training simulators.

Chairman and Managing Director Ashok Atluri expressed confidence in the company’s ability to achieve its projected revenue of ₹900 crore for FY25, emphasizing that Zen Technologies’ expansion efforts, acquisitions, and R&D investments will be instrumental in sustaining long-term growth.

How Is Zen Technologies Expanding Its Manufacturing and Innovation Capabilities?

Zen Technologies has undertaken significant expansion efforts, including the growth of its assembly unit in Maheshwaram, which enhances its production capacity and strengthens its ability to meet the rising demand for UAV propulsion systems, combat training simulators, and autonomous defense technologies. This expansion aligns with the company’s long-term vision of scaling its manufacturing capabilities to fulfill large defense contracts efficiently.

In addition to facility expansion, Zen Technologies has strategically acquired key companies to reinforce its expertise in aerospace, UAV propulsion, and defense robotics. The acquisition of Vector Technics, a company specializing in electrical propulsion and internal combustion (IC) engine technology for UAVs and robotics, enhances Zen Technologies’ capabilities in developing next-generation drone propulsion systems. The integration of Bhairav Robotics, a leader in combat robotics and autonomous defense systems, further strengthens Zen Technologies’ focus on AI-driven combat technologies and autonomous military applications.

Another major development is the acquisition of Applied Research International (ARI) and ARI Labs, both known for their defense simulation and naval training technologies. This move allows Zen Technologies to broaden its presence in maritime defense training solutions, ensuring that it remains a key player in military training simulations. The acquisitions reinforce the company’s leadership in cutting-edge defense technology solutions, positioning it as a dominant force in UAV propulsion, robotics, and military simulation technologies.

What Is Zen Technologies’ Profitability Outlook for FY25?

Zen Technologies has reported an increase in profitability, largely driven by higher other income in Q3 FY25. The company remains confident in achieving its EBITDA margin target of 35% and PAT margin of 25% by the end of FY25, reflecting strong operational efficiency and cost management. This stability further solidifies its position as a highly profitable defense technology firm, capable of sustaining long-term revenue and margin growth.

The company’s financial outlook remains positive, supported by a strong order pipeline and an expanding portfolio of defense contracts. Zen Technologies continues to secure high-value defense orders, ensuring steady revenue inflow in the coming quarters. Furthermore, with the growing importance of UAV propulsion systems, autonomous defense technology, and military training solutions, the company’s strategic focus on innovation and expansion places it in a strong position for future growth.

Why Is Zen Technologies Poised for Future Growth?

The increasing global demand for advanced defense technology solutions is driving significant opportunities for Zen Technologies. As military forces worldwide shift towards autonomous warfare, AI-driven combat systems, and UAV-based surveillance, the company’s cutting-edge defense innovations provide a competitive advantage in securing large-scale defense contracts.

With India’s strategic focus on self-reliance in defense manufacturing, Zen Technologies stands to benefit from government policies that encourage domestic defense production and technological advancement. The company’s investments in R&D, strategic acquisitions, and facility expansion position it as a leader in UAV propulsion, defense robotics, and combat training simulations.

Furthermore, Zen Technologies’ strong liquidity position, high-margin business model, and robust order book ensure that it remains a financially stable and growth-oriented enterprise. As it continues to invest in emerging defense technologies, the company is expected to play a pivotal role in shaping the future of India’s defense technology landscape.

Zen Technologies has delivered a strong Q3 FY25 performance, demonstrating robust revenue growth, increased profitability, and a rapidly expanding order book. The company’s strategic acquisitions in UAV propulsion, robotics, and defense simulation reinforce its position as a market leader in defense technology solutions. With the Indian government’s growing investment in defense modernization, Zen Technologies is well-positioned to capitalize on industry trends, secure new defense contracts, and drive long-term expansion.

As the company continues to strengthen its technological capabilities, manufacturing footprint, and defense sector partnerships, it is set to remain a key player in shaping the future of defense technology in India and beyond.