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Zen Technologies held its Q4 FY2025 earnings conference call on May 19, 2025, with key management members including Mr. Ashok Atluri (CMD), Mr. Afzal Malkani (CFO), Ms. Shilpa Choudari (Whole Time Director), and Ms. Abhilasha Atluri (Investor Relations).
Mr. Atluri mentioned the company expects to receive orders worth approximately ₹800 crore by H1, primarily for simulators. Additional orders may arise due to recent geopolitical events impacting anti-drone systems.
Zen Technologies began R&D in anti-drone systems in 2018, focusing on band-independent solutions capable of handling various frequencies, unlike standard systems limited to commercial frequencies (2.4 GHz and 5.8 GHz).
The company's anti-drone systems are indigenously designed, developed, and made in India, with in-house capabilities including detector, jammer, radar, and electronic optics.
Zen Technologies was the sole compliant vendor in a 2023 RFP requiring IDDM (Indigenously Designed, Developed and Manufactured) standards.
The company's anti-drone systems were deployed during recent operations, proving their effectiveness in real-world scenarios.
Mr. Atluri reaffirmed the expectation of 50% average CAGR growth, although this year's growth may be muted due to order delays. The company aims for a cumulative turnover exceeding ₹6,000 crore over the next three years (FY26-FY28), with projected turnovers of ₹1,350 crore, ₹2,000 crore and ₹3,000 crore respectively.
Management believes the government should control software in Chinese products (cars, weapons, mobile phones) to mitigate potential risks.
Regarding the delay in orders, Mr. Atluri attributed it to the government's consolidation of anti-drone system requirements and expressed optimism about accelerated procurement following recent events.
Zen Technologies' subsidiary, UTS, collaborated with DRDO, supplying jammers and detectors for anti-drone systems.
The company does not design its own chips but utilizes ready-made chips from non-Chinese sources, aiming for chip independence.
Zen has integrated the L70 weapon and launched remote control weapon stations through AI tuning, which can be integrated with anti-drone systems.
When asked about FY26 guidance, management refrained from providing a specific number, citing tentativeness, but reaffirmed the 50% CAGR target for the next three years.
Margins are expected to be maintained at 25% PAT and 35% EBITDA.
BEL recently received an order of ₹572 crore for counter drone system, and Zen expects to receive orders during this and the next quarter for anti-drone systems.
Regarding US business expansion, Zen has personnel in the US and anticipates orders in FY2027.
Zen's consolidated order book is larger than the standalone order book of ₹692 crore, with recent acquisitions adding to the total.
Zen's anti-drone systems were used and there were significant interceptions.
The acquisition of ARIPL, it would create a scale multiplier different to the growth trajectory of ARIPL. It is expected that 400-500 crore turnover can be achieved with ARI.
Vector is being approached by European and American companies and it should be tens of Crores in the immediate future. But eventually it is running into at least 300-400 Crores kind of thing.
Total cash balance is around ₹1,037 crore, with ₹410 crore from QIP proceeds and ₹625 crore from internal accruals. Most of the cash balance we are going to utilize for this organic and inorganic growth, both. And financial year 2024-2025 ARIPL revenue was ₹137 Crores.
The products are being tested in Operation Sindoor and the inputs are helping improve the products.
In five years time, drones, anti -drones, and hard kill options will be about 70% and maybe 30% will be training and simulation.