Zen Technologies: Defence Sector Thrives Amid Q2 Revenue Challenges and Profit Moderation

Zen Technologies, a frontrunner in combat training simulators and anti-drone systems, embodies the defence theme's allure amid India's self-reliance push. Recent ₹289 crore MoD contracts for anti-drone upgrades and ₹120 crore for training nodes highlight robust demand. However, Q2 FY26 earnings exposed vulnerabilities—procedural delays shrank the order book to ₹675 crore, triggering revenue contraction and profit moderation despite debt-free status and high ROE of 26%.
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Management remains upbeat, citing solid liquidity, indigenous R&D edge, and export potential targeting ₹6,000 crore revenue by FY28. Yet, high valuations (P/E 50) and YTD stock decline of 45%—versus Sensex gains—underscore the disconnect between thematic heat and execution realities.
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Key Highlights

Revenue Down: Q2 FY26 at ₹173.5 Cr (-28% YoY); H1 down 30%.
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Profit Dip: PAT ₹62 Cr (-2% YoY), EPS ₹6.61.
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Order Wins: ₹289 Cr anti-drone, ₹120 Cr training node from MoD.
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Order Book: ₹675 Cr consolidated as of Sep 2025.
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Stock Woes: -45% YTD, high debtors (154 days).
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Bright Spots: Debt-free, 37% ROCE, defence export growth ahead.
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Sources: Economic Times; Screener.in; Moneycontrol; NSE filings.