Company Update : Zen Technologies by Motilal Oswal Financial Services Ltd
Bottom-line beat due to higher other income and lower tax rate
* The company reported a weak set of numbers in 2QFY26 with a miss on revenue and EBITDA, while PAT beat our estimates.
* Revenue decreased 48% YoY to INR1.2b, missing our estimate by 10%.
* Gross margins were 140bp below our expectation at 55.1% vs our estimate of 57.5%.
* Absolute EBITDA declined 47% YoY to INR418m, indicating a miss on our estimates by 13%. EBITDA margin at 33.5% expanded 60bp YoY, though it was below our estimates.
* However, the company’s PAT decreased 29% YoY, beating our estimates by 16% at INR462m vs our estimate of INR398m due to higher-than-expected other income and lower tax rate. Pat margin expanded 1000bp YoY to 37.0% vs our estimate of 28.9%.
* The standalone order book was about INR4.8b as of Sep’25.
* For 1HFY26, revenue/EBITDA/PAT declined 52%/56%/40% YoY, while EBITDA margin contracted 290bp YoY to 33.9%. As of 1HFY26, OCF/FCF turned positive to INR1.3b/1.2b, compared to net cash outflows in the previous year.
* The company has repaid all of its debt and is debt-free as of 1HFY26.
* During the quarter, Zen Tech’s shareholding in AI-Turing was reduced from 51% to 49% following the fresh issue of shares in AI-Turing to new investors.
* Zen Tech completed the acquisition of the remaining 24% stake in Applied Research International Pvt. Ltd. (ARIPL), taking full ownership.
For More Research Reports : Click Here
For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412
