Following Q3 earnings, the share price of Zen Technologies, a defense stock, drops by more than 17%.

In Q3FY25, Zen Technologies' operating revenue climbed 44% year over year (YoY) to ₹141.52 crore from ₹98.08 crore. From ₹241.69 crore in the September quarter, the revenue fell 41.44%.

Following the release of the company's Q3 earnings, Zen Technologies' share price fell more than 17% in early trading on Monday. On the BSE, Zen Technologies' stock fell 17.62% to ₹1,111.30 per share.

In the third quarter of FY25, Zen Technologies, a drone manufacturer, recorded a net profit of ₹38.62 crore, up 22% from ₹31.67 crore in the same quarter last year due to greater other income. Net profit decreased 40.8% sequentially from ₹65.24 crore in the prior quarter.

In Q3FY25, the company's operating revenue climbed 44% year over year (YoY) to ₹141.52 crore from ₹98.08 crore. From ₹241.69 crore in the September quarter, the revenue fell 41.44%.

EBITDA (earnings before interest, tax, depreciation, and amortization) increased 21% year over year to ₹58.69 crore from ₹48.41 crore. However, quarter-over-quarter (QoQ), EBITDA dropped 33.18% from ₹87.84 crore.

EBITDA margins improved from 35.12% QoQ to 35.90% YoY, while they declined from 47.34% QoY.

"We saw an increase in profitability this quarter as a result of higher other income, but we are still optimistic that we will meet our EBITDA goal of 35% and PAT margins of 25% by the end of the fiscal year. As of December 2024, our order book was still strong at ₹816.91 crores, indicating a strong pipeline for the upcoming quarters, stated Ashok Atluri, Chairman and Managing Director of Zen Technologies.

Investing Strategically
On February 15, Zen Technologies declared its intention to make strategic investments in Vector Technics Private Ltd. and Bhairav Robotics Private Ltd.

"The investments boost self-reliance in defense manufacturing by strengthening Zen's capabilities in autonomous robotics, aerospace components, and UAV propulsion. These calculated actions also put Zen in a position to compete internationally, serving customers looking for advanced military products manufactured in India.

As a result of the transactions, Zen Technologies now has a 51 percent controlling interest in Vector Technics, a top supplier of drone and UAV propulsion and power distribution systems. Through this acquisition, Zen can strengthen its position in assisting the worldwide robotics and drone industries while also venturing into the aerospace component market.

Additionally, Zen Technologies has strengthened its presence in the defense robotics and autonomous systems market by acquiring a 45.33% share in Bhairav Robotics.

According to Zen Technologies, Bhairav Robotics specializes in cutting-edge robotic goods such autonomous weapon systems and quadrupedal robots.