By Ajai Shukla
Business Standard, 29th July 24
Hyderabad-based indigenous anti-drone technology provider and simulator training solutions provider Zen Technologies, announced strong financial results for the first quarter of financial year 2024-25 (Q1FY25).
The company’s revenue from operations for Q1FY25 amounted to ₹254 crores, almost doubling its revenue of ₹132 crore from the first quarter of Q1FY24.
This growth was mirrored in the company’s Operational EBITDA, which reached ₹103 crores. Its net profit came to of ₹74 crores, recording a growth of 56% and 57% year-on-year respectively.
Zen Technologies chief Ashok Atluri said: “I am pleased to share that Zen Technologies Limited has had an exceptionally strong start to FY25.”
The company’s main line of business remains training and simulation, including indigenous technical training equipment like virtual simulators and live ranges. In the last few years, the armed forces have placed growing emphasis on tactical training, including putting soldiers through combat scenarios that are driven by software produced by the research & development (R&D) departments of defence firms.
Zen Technologies has been producing training simulators for two decades now, but without evoking major interest from the Indian military. However, the Russia-Ukraine war has been a landmark event that has underscored the importance of competent simulator training, as compared to merely acquiring advanced combat equipment.
This shift is expected to drive significant growth for our company.
“Our early investment in counter-drone systems since 2018 has positioned us at the forefront of this critical technology,” said Atluri.
“With the government of India's focus on the ‘Buy Indian – Indian designed, developed and manufactured’ (Buy Indian – IDDM) category, we are well-placed to be the preferred supplier for the Indian armed forces”, he said.
Zen Technologies has laid claim to be an intellectual property (IP) powerhouse, which has filed for more than 155 global patents, of which 75 have been granted. “Our extensive library of software, electronic, and mechanical modules, developed over the last 30 years, enables rapid product realisation, says Atluri.
The company says this in-house capability has allowed it to introduce innovative products like the Hawkeye anti-drone system, Barbarik URCWS, Prahasta automated quadruped, and Sthir Stab 640 stabilised sight, which are set to open new revenue streams.
Zen’s operational model leverages in-house R&D and outsourced production. Atluri says this has enabled significant scalability with minimal capital expenditure, providing its business with good operating leverage to our business. The firm says it is expanding its assembly and integration capabilities to support this growth.
“Additionally, we are experiencing strong regulatory tailwinds, including increased utilisation of simulators by the armed forces and aggressive export targets set by the government. Our strong balance sheet and ongoing investment in R&D ensure we remain at the cutting edge of technology, ready to meet evolving customer needs.
The company has issued a guidance of ₹900 crores of turnover in the current financial year. It says it is confident of meeting that target.
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Zen Technologies: Financial Highlights Q1FY25
- 92 per cent growth in revenue year-on-year (YOY) to Rs 254 crore
- Profit after tax (PAT) grew 57 per cent YoY
- 56 per cent growth YOY in operational EBITDA to Rs 103 crore
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