Zen Technologies Ltd Share Price – NSE /  BSE

Aerospace & Defence, Small Cap

Zen Technologies announced that the Annual General Meeting (AGM) of the company will be held on 14 September 2024.

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Zen Technologies has successfully raised Rs 1,000 crore through its first-ever Qualified Institutional Placement (QIP). The QIP, launched on 21 August 2024, and closed on 23 August 2024, saw significant interest from both domestic and international investors, underscoring strong confidence in the company's strategic vision and market position.

Zen Technologies allocated 62,46,096 equity shares, each with a face value of Re 1, to qualified institutional buyers (QIBs) at an issue price of Rs 1,601 per share. This pricing represents a discount of approximately 5% to the QIP floor price of Rs 1,685.18 per share, as determined by SEBI regulations. The QIP was oversubscribed by ¡­5 times, reflecting the high demand and investor confidence in Zen Technologies' growth strategy.

Key investors participating in this QIP include Kotak Mutual Fund, White Oak Offshore Fund, White Oak Mutual Fund, Motilal Oswal Mutual Fund, and Bandhan Mutual Fund, amongst others.

The proceeds from the QIP will be strategically deployed to accelerate Zen Technologies' growth plans. These include exploring inorganic growth opportunities and funding working capital requirement for the expected rapid growth in the coming years. This capital infusion aligns with the company¡¯s long-term vision to penetrate adjacent markets (Naval and Air Force), to continue deep R&D in the field of counter-drone solutions, and expand its footprint in the global defence market.

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Zen Technologies has received the Indian Patent Grant for its innovative Trigger Sensing System, a crucial component of theTacSim® range of products. This patent, granted on 22 August 2024, marks the 17th patent awarded to the company in the calendar year 2024 and the 7th in the financial year 2024- 25.

The TacSim® product line is renowned for its Force on Force Training Systems, designed to evaluate and enhance the operational capabilities of the defense forces. This latest patent ispart of a suite of five patents related to the TacSim® range, which includes a Laser Unit,Indoor Tracking Unit, HE36 Grenade Simulator, Weapon Range Estimation System, and now, the Trigger Sensing System.

The TacSim® product line is scalable and can incorporate the participants of all three services engaged in an integrated joint training exercise on all types of terrain. Extremely versatile in employment, it is an exceptional training tool for realistic training of tri-servicetactical groupings of integrated theatre commands.

The Trigger Sensing System, protected under the present Patent will be valid until 22nd October 2030. This system provides an enhanced method for accurately detecting the point of trigger activation in various firearm simulators, ensuring precise and realistic training experiences. It incorporates advanced technologies that simultaneously sense multiple aspects of firearm recoil, including vibration, shock, and sound, thereby minimizing the scope for false triggers and enhancing training accuracy.

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Revenue from operations surged 91.74% year on year (YoY) to Rs 253.96 crore in the quarter ended June 2024.

Profit before tax stood at Rs 102.98 crore in Q1 FY25, registering a growth of 53.75% from Rs 66.98 crore reported in the same period a year ago.

The company’s operational EBITDA grew by 55.96% to Rs 103.20 crore in Q1 FY25 as compared to Rs 66.17 crore posted in Q1 FY24. EBITDA margin slipped to 40.64% in Q1 FY25 as against 49.96% reported in Q1 FY24.

As of 30 June 2024, the company's total order book stood at Rs 1,158.54 crore, comprising Rs 714.79 crore from the domestic segment and Rs 437.15 crore from the export segment.

Ashok Atluri, chairman and managing director, said, “I am pleased to share that Zen Technologies has had an exceptionally strong start to FY25. Our cornerstone remains in training and simulation, including technical training equipment like virtual simulators and live ranges. In the last few years, the armed forces have recognised the increasing need for tactical training, preparing soldiers for actual combat scenarios. This shift is expected to drive significant growth for our company. Furthermore, the surge in interest post Ukraine war highlights the importance of competent training over merely acquiring advanced equipment.

Our early investment in counter-drone systems since 2018 has positioned us at the forefront of this critical technology. With the Government of India's focus on the Buy Indian IDDM category, we are well-placed to be the preferred supplier for the Indian Armed Forces.

We continue to be an IP powerhouse, with over 155 global patents filed and about 75 granted. Our extensive library of software, electronic, and mechanical modules, developed over the last 30 years, enables rapid product realisation. This has allowed us 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

Our operational model, which leverages in-house R&D and outsourced production, has enabled significant scalability with minimal capital expenditure, providing good operating leverage to our business. We are expanding our 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. We are excited about the future and confident in meeting our guidance of Rs 900 crore of turnovers in the current financial year. Thank you for your continued support.”

Zen Technologies is engaged in design, development and manufacture of Training Simulators for Police and Para-military Forces, Armed Forces, Security Forces, Government Departments like Transport, Mining, Infrastructure and Civilian market.

The scrip hit an all-time high at Rs 1,607.85 in intraday today.

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