Zen Tech shares extend fall to 3rd session, plunge another 10% on weak Q3 numbers

Zen Tech share price has corrected 33% in its three-day fall.

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26 Aug, 2025 12:21

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Shares of Zen Technologies continued to feel the heat of strong selling for the third session in a row after the company reported a sharp sequential decline in its Q3 earnings. The stock tanked 10 percent in just today's session while losing 33 percent through its three-day fall.

At 09.53 am, shares of Zen Technologies were trading at Rs 976.90 on the NSE.

While the drone manufacturer's Q3 earnings showcased growth on an on-year basis, sharp weakness was felt on a sequential basis, largely due to delays in booking certain contracts, which also acted as a dampener for investors. Brokerage firm Motilal Oswal Financial Services pointed Zen Tech's underperformance in comparison to broader indices on concerns related to growth visibility, order inflows, and acquisition plans.

Zen Technologies reported a net profit of Rs 38.62 crore in Q3, a 22 percent increase from Rs 31.67 crore in the same quarter last year, driven by higher other income. However, sequentially, net profit nearly halved from Rs 65.24 crore in the previous quarter.

Revenue grew 44 percent year-on-year to Rs 141.52 crore, up from Rs 98.08 crore, but saw a 41 percent decline from Rs 241.69 crore in the September quarter due to delays in shipments and a shift in revenue booking to Q4.

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On the other hand, EBITDA margins weakened to 35.90 percent from 47.34 percent in the same period last year but improved from 35.12 percent in the previous quarter.

Looking ahead, the company expects inflows of R 800 crore to materialise during Q4-FY26, providing revenue visibility beyond FY25. Despite a miss on revenues for 3QFY25, it maintains its revenue guidance of Rs 900 crore for FY25, with an EBITDA margin target of 35 percent.

Additionally, the company is expanding its portfolio across various simulators, highlighted by the recent acquisition of ARIPL, a naval simulator firm, as well as MoUs and partnerships with other companies for air-based simulation solutions.

However, due to lower-than-expected order inflows in the fiscal year thus far, brokerage firm MOFSL has revised its earnings estimates downward by 4 percent, 25 percent, and 22 percent for FY25, FY26, and FY27, respectively. Along with this, the firm also reduced its target multiple for Zen Tech as the company was previously valued higher due to growth prospects, which now appear weak until FY26.

However, beyond FY26, MOFSL expects a rebound in overall ordering driven by large-sized simulator orders, recent acquisitions, and MoUs, as the company expands its capabilities in simulators, anti-drone technology, and other new areas. That said, delays in the finalisation of tenders may continue to affect execution in the near to medium term, the brokerage wrote.

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