Zen Technologies swings to operating loss as expenses rise 85.98%
Revenue fell 10.48% YoY and other income supplied 42.05% of pre-tax profit; management said most order-book conversion is scheduled from Q2 FY27.
Filed 25 Jul 2026, 17:59 IST · after market close · Zen Technologies Ltd (ZENTEC)
Key takeaways
- Revenue fell 10.48% YoY while expenses rose 85.98%, turning operating profit into a loss of Rs 27.52 cr.
- Operating margin fell 61.94 percentage points YoY to -19.43%, extending the decline seen in every quarter shown since Q4FY25.
- Net profit of Rs 31.85 cr was supported by other income, which contributed 42.05% of pre-tax profit.
Price around the results
Expenses overwhelmed lower revenue in Q1FY27
Zen Technologies reported consolidated revenue of Rs 141.64 cr, down 10.48% YoY and 20.46% QoQ, while expenses rose 85.98% YoY and 17.65% QoQ. Costs therefore grew as revenue contracted, taking operating profit to a loss of Rs 27.52 cr. Net profit still stood at Rs 31.85 cr because other income was Rs 19.16 cr and accounted for 42.05% of pre-tax profit.
Operating margin fell below the Industrials peer median
Operating margin narrowed by 61.94 percentage points YoY and 38.70 percentage points QoQ to -19.43%, as expenses grew faster than revenue. The margin has declined in every quarter shown since Q4FY25. Among 12 Industrials peers that have reported the same quarter, Zen Technologies ranked last on operating margin, trailing the 7.34% sector median by 26.77 percentage points; the tax rate also rose 3.35 percentage points QoQ, although interest expense fell 46.04%.
Management points to order-book conversion from Q2 FY27
Management said most of the order book is scheduled to convert into revenue from Q2 FY27 onward and that delivery schedules remain on track. The company also said it entered the air-simulator domain through the improved order book and expects to formalise OEM partnerships during FY27 and Q3 FY27. During the quarter, management said it introduced an AI-powered anti-drone system, Hyperstrike, Zen Vrishab and the Integrated Smart Border Suite.
No immediate market reaction after the filing
The consolidated results were filed after market close, so there was no immediate reaction in the supplied data. After the previous eight results, the stock rose twice and fell six times, with a median absolute move of 5.00%, indicating that declines have been more common than rises after results.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹142 cr | ₹178 cr | -20.46% | -10.48% |
| Other income | ₹19 cr | ₹23 cr | -15.59% | -12.07% |
| Expenses | ₹169 cr | ₹144 cr | +17.65% | +85.98% |
| Operating profit | ₹-28 cr | ₹34 cr | — | — |
| Operating margin (%) | -19.43% | 19.27% | — | — |
| Interest | ₹1 cr | ₹2 cr | -46.04% | -68.50% |
| Depreciation | ₹8 cr | ₹6 cr | +34.59% | +23.97% |
| Profit before tax | ₹46 cr | ₹66 cr | -30.79% | -40.59% |
| Tax | ₹13 cr | ₹17 cr | -21.90% | -42.05% |
| Net profit | ₹32 cr | ₹47 cr | -32.58% | -39.98% |
| EPS (₹) | ₹3.83 | ₹3.51 | +9.12% | -27.87% |
Operating margin of -19.43% compares with a Industrials sector median of 7.34% across 12 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company introduced four products during the quarter: an AI-powered anti-drone system, Hyperstrike, Zen Vrishab and Integrated Smart Border Suite.
Guidance & outlook
- Most of the order book is scheduled to convert into revenue from Q2 FY27 onward.
- The company expects to formalise partnerships with OEMs during FY27 and Q3 FY27.
- The company says it remains on track with its delivery schedules.
- The company aims to provide training solutions across the Army, Navy and Air Force.
Expansion
- The company entered the air simulator domain through its improved order book.
New products
- New products introduced were an AI-powered anti-drone system, Hyperstrike, Zen Vrishab and the Integrated Smart Border Suite.
Competition
- The company says it is the leader in Army and Navy training domains.
What to watch
- Whether revenue moves above Rs 141.64 cr as management's stated order-book conversion begins from Q2 FY27.
- Whether operating margin improves from -19.43% after the cost increase seen this quarter.
- Whether other income remains as significant as its 42.05% share of pre-tax profit.