Buy Zen Technologies Ltd for the Target Rs. 1,850 by Choice Institutional Equities
Key Conference Call Highlights
Order Book & Revenue Guidance
* Consolidated order book stood at INR 1,336 Cr as of March 31, 2026. Of this, ~INR 1,000 Cr is scheduled for execution in FY27 (primarily in Q2 and Q3), remaining INR 326 Cr represent AMC revenues recognised over time
* Cumulative revenue guidance of INR 4,000 Cr for FY27 and FY28
* Long-term margin guidance maintained of 35% at the operational EBITDA level and 25% at the PAT level
* Bidding Pipeline: ~INR 1,500 Cr in competitive bids and another potential INR 1,000 Cr in single-vendor tenders. The pipeline split is 55% anti-drone systems and 45% simulators
New Product Launches & Innovation
* Hyperstrike: Autonomous, AI-enabled interceptor drone with ~400 km/h speed and ~5-minute loiter time; management expects it to become the largest product within two years, with initial production capacity of ~5,000–15,000 units per shift per month starting this year
* The company has expanded its anti-drone capabilities with a wide 70 MHz–12 GHz frequency range, enabling it to counter drones that dynamically shift frequencies
* Having secured arms and ammunition licenses, the company is developing 30mm smart ammunition with RF-based programming and pre-fragmentation, capable of neutralising drones within a 10x10 meter radius, with manufacturing expected to begin next FY
* Vrishabh: A new unmanned ground vehicle with a 150 kg payload, ~50 km/h speed and ~100 km range, designed for combat logistics, casualty evacuation and weapon integration, with commercial launch targeted by FY27-end
* A cybersecurity suite developed by AnaWave with zero foreign dependency, offering six-layer protection and integration across control centres, ships and aircraft to prevent hacking
Industry Tailwinds & Strategic Outlook
* Recent geopolitical conflicts are accelerating military preparedness, driving strong demand for anti-drone systems and simulators, while the Indian government’s IDDM push supports indigenous defence solutions
* Rising threats at global maritime choke points are driving demand for naval training, with Zen Technologies Limited expanding into naval simulation and targeting export opportunities across South America and Europe.
Subsidiary Performance
* Subsidiaries contributed ~INR 260 Cr to FY26 revenue, with ARI accounting for ~INR 131 Cr at a 30.3% PAT margin, while UTS reported a PAT margin of 26.5%.
* Management expects ARI and UTS to generate ~INR 365 Cr revenue in FY27E, with ARI scaling to ~INR 300 Cr and UTS to ~INR 150–200 Cr by FY28E.
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SEBI Registration no.: INZ 000160131
