Zen Technologies in bear grip: Triggers behind the 10% fall in the defence stock

Shares of Zen Technologies tumbled over 10% on Monday after the defence firm announced its Q1 earnings. A fall in revenue, EBITDA and net profit on a year on year basis led to negative sentiment around the stock today. Order book as at June 30, 2026 stood at Rs 1,239.02 crore, falling about 7% from the end of FY26. Management of the defence firm expects execution to gather pace from the second quarter, led by fresh order inflows.

Meanwhile, Zen Technologies shares crashed 10.39% to Rs 1585.55 in the current session against the previous close of Rs 1769.50. Market cap of the firm declined to Rs 15,213 crore. The stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day but higher than the 100 day, 150 day and 200 day simple moving averages. 

Zen Technologies reported a 28% fall in net profit to Rs 34.4 crore from Rs 48 crore a year ago. Revenue declined 10.5% year-on-year to Rs 141.6 crore in the last quarter from Rs 158.2 crore in the year ago period.

Operating performance fell below expectations with EBITDA declining 40.2% to Rs 38.7 crore in Q1 from Rs 64.7 crore in the year-ago period. EBITDA margin fell sharply to 27.3% from 40.9%.

A rise in operating costs dented profitability of the company. 

Employee expenses rose to 24% of revenue from 20% a year earlier, manufacturing costs rose to 9% from 5%, while other expenses nearly doubled to 21% from 10%.

Meanwhile, Zen Technologies' order book has remained volatile over the last few years. At the end of FY23, the order book stood at Rs 473 crore, rose to Rs 1,402 crore in FY24, fell to Rs 692 crore in FY25, and recovered to Rs 1,336 crore by the end of FY26.

Zen Technologies Limited designs, develops, and manufactures defence training systems, based on sensors and simulators technology. The company’s category of products includes land-based military training simulators, driving simulators, live range equipment and anti-drone systems. The company also has a training platform in Hyderabad, with an integration of its complete product range. Its Anti-Drone System (ZADS) system works on drone detection, classification and tracking on passive surveillance, camera sensors and neutralization of threat by jamming drone communication.