Zen Technologies Shares Plunge Over 10%, Weak Q1 Earnings & Margin Pressure Worry Investors

Mumbai: Shares of Zen Technologies Ltd fell more than 10 percent in early trade on Monday after the defence technology company reported weak financial results for the first quarter of FY27.

The decline followed lower revenue, profit and operating margins during the April-June quarter.

The stock dropped 10.39 percent to an intraday low of Rs 1,585.55 on the BSE. It later recovered some losses and was trading at Rs 1,688.95, down 4.55 percent.

Revenue Drops

Zen Technologies reported revenue from operations of Rs 142 crore in Q1 FY27, down 10.5 percent from Rs 158 crore in the corresponding quarter last year.

The fall in revenue showed weaker business activity during the quarter. Investors are now closely watching the company’s order book and its management outlook for the remaining part of FY27.

The company develops defence training systems, anti-drone solutions and other technology products for security forces.

Margin Pressure

Operating performance weakened sharply during the quarter. Earnings before interest, tax, depreciation and amortisation, or EBITDA, declined 38.8 percent to Rs 38.7 crore.

The company had reported EBITDA of Rs 63.3 crore in the same quarter of the previous financial year.

Its EBITDA margin narrowed to 27.3 percent from 40 percent a year earlier. The sharp margin contraction indicated that rising costs and lower operating efficiency had placed pressure on profitability.

Net profit declined 27.8 percent to Rs 34.5 crore, compared with Rs 47.8 crore in the year-ago quarter.

The quarterly performance was also affected by a one-time loss of Rs 3.4 crore, according to the company.

QIP Extension

Zen Technologies’ board approved a two-year extension for using the money raised through its qualified institutional placement.

The company had raised the QIP funds in August 2024. It has been regularly providing updates to the stock exchanges regarding the use of these proceeds.

Following the weak results, investors will focus on new orders, revenue recovery and improvement in margins over the coming quarters.

Zen Technologies shares have traded between Rs 1,224 and Rs 2,023.40 on the BSE over the past 52 weeks.

Disclaimer: This article is for informational purposes only and does not constitute investment advice; investors should consult qualified financial advisers independently.