Zen Technologies shares sink 7% after procurement delays lead to weak Q2

Shares of Zen Technologies Ltd. declined 7% in Monday's trade after the company reported a weaker performance for the September quarter (Q2FY26) on a year-on-year basis, with the decline largely attributed to delays in procurement due to other military priorities under Operation Sindoor.

Revenue declined 28% YoY, while EBITDA fell 19.5%. However, margins were aided by lower manufacturing costs.



Adjusted profit after tax dropped 4% YoY to ₹61 crore, driven by higher other income and improved margins. Operating cash flow improved, driven by a favourable change in working capital, particularly a reduction in receivables.

Despite the weak headline numbers, Zen Technologies managed to beat estimates on revenue, EBITDA, and PAT.

The management said performance during the quarter was subdued as national emergency priorities delayed RFPs related to Operation Sindoor. However, it maintained that long-term revenue visibility remains strong.

The company also said that recent war emergencies have validated its products in real-world field scenarios.

Zen Tech's order backlog stood at ₹675 crore, equivalent to about 0.8 times its trailing twelve-month sales. The company secured new orders worth only ₹94 crore during the quarter under review.

On a year-on-year basis, the order book mix showed a 5% decline in the domestic segment, which now accounts for 82% of total orders, while export orders, comprising 18% of the order book, fell sharply by 68%.

The company's core equipment and AMC businesses also witnessed subdued new order inflows during the quarter

Zen Technologies will hold its post-results conference call on October 27.

Key factors to watch in the management commentary include:

- Revised guidance for FY26
- Order book breakup by product and segment post Q2
- The impact of emergency procurement
- Progress of acquired companies
- Updates on the utilisation of QIP proceeds.