Zen Technologies‘ stock is taking a hit for the third straight session, dropping another 10% today, adding up to a 33% loss in just three days. The sharp decline comes after the company posted weaker-than-expected Q3 earnings, with investors reacting negatively to a significant drop in profits compared to the previous quarter.
As of 9:53 AM, the stock was trading at ₹976.90 on the NSE.
What’s behind the drop?
While Zen Technologies’ Q3 earnings look better compared to last year, they fell sharply on a quarter-on-quarter basis, mainly due to delays in booking contracts. This uncertainty has left investors worried, and analysts at Motilal Oswal Financial Services (MOFSL) pointed out concerns about the company’s growth visibility, order inflows, and acquisition plans.
Zen Technologies reported a net profit of ₹38.62 crore in Q3, a 22% rise from ₹31.67 crore a year ago, thanks to higher other income. However, compared to the previous quarter, profit almost halved from ₹65.24 crore.
Revenue also saw mixed results—up 44% YoY to ₹141.52 crore but down 41% from ₹241.69 crore in the previous quarter due to shipment delays and revenue being pushed to Q4.
EBITDA margins came in at 35.9%, down from 47.34% last year, but slightly better than 35.12% in the last quarter.
What’s next for Zen Technologies?
The company expects ₹800 crore worth of orders to come in Q4-FY26, which should boost revenue beyond FY25. Despite the Q3 revenue miss, Zen Tech is sticking to its ₹900 crore revenue target for FY25 and an EBITDA margin goal of 35%.
They’re also expanding into naval and air-based simulators, recently acquiring ARIPL, a naval simulator firm, and forming new partnerships.
Analyst concerns
However, brokerage firm MOFSL has cut its earnings estimates for Zen Tech by 4% for FY25, 25% for FY26, and 22% for FY27. Previously, the company was valued higher due to strong growth prospects, but with slower-than-expected order inflows, analysts are adjusting their expectations.
That said, MOFSL sees a potential rebound beyond FY26, driven by large simulator orders, acquisitions, and new technologies like anti-drone solutions. However, execution delays due to tender finalizations could continue to be a challenge in the near term.
For now, investors remain cautious, waiting to see if the company can bounce back in the coming quarters.
