 "Anti-drone tech firm Zen Technologies announces leap in financial results")
Reflecting a secular upswing in the earnings and profitability of indigenous defence firms, Hyderabad-based anti-drone technology and defence training solutions provider Zen Technologies announced a sharp rise in its financial results for Q4 FY24 and FY24.
On Monday, the company reported that revenue increased to Rs 430 crore, a 167 per cent rise year-on-year. Profit after tax was Rs 129 crore, representing a 243 per cent rise year-on-year.
“I am delighted to report that FY24 marks a significant milestone in our financial performance, achieving record sales, profitability, and order wins. We secured orders worth Rs 1,358 crore, reflecting a notable shift in the armed forces’ perception towards training equipment and anti-drone systems,” said Ashok Atluri, Zen’s chairman and managing director.
Over the past three years, Zen Technologies has seen a remarkable increase in earnings. According to Atluri, income in FY22 was Rs 60 crore. In FY23, it more than doubled to Rs 160 crore, and in FY24, it doubled again to Rs 430 crore. He expects a repeat performance next year, with earnings exceeding Rs 900 crore.
“With a robust order book exceeding Rs 1,400 crore as of March 31, 2024, we are poised for sustained growth in FY25, aiming to surpass the Rs 900 crore sales mark,” he said.
Zen’s turnover has also been boosted by increased export orders from neighbouring countries. “Through active participation in major trade shows and exhibitions, supported by the government, we continue to generate potential leads to bolster our international presence,” said Atluri.
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The shift in focus from drones and simulators to anti-drone systems began a decade ago, starting with the Azerbaijan-Armenia war and accelerating with Russia’s invasion of Ukraine. In 2021, the Indian Air Force put forth an emergency requirement for anti-drone systems, which Zen Technologies supplied in 2023.
For the first time, India’s military has started procuring simulators under emergency procurement regulations.
The armed forces initiated the process of emergency procurement in response to the Chinese intrusions into eastern Ladakh in 2020. Emergency procurement allows the armed forces to bypass normal procedures to acquire equipment to handle emergencies.
While normal procurement takes at least three to four years, the timeframe can be reduced to two to three months through emergency procurement. Atluri noted that his experience with emergency procurement by the Indian armed forces has shown it to be a more efficient process that should be used more frequently.
Zen Technologies attributes its improved results to the government's "aatmanirbhar bharat" (self-reliant India) initiative and to the push for indigenisation by the Ministry of Defence (MoD).
“Our successful performance reaffirms our business model of self-funding three decades of R&D for potential products. The pivotal role played by government initiatives aimed at indigenisation has provided us with the right opportunity to amplify our success,” said Atluri.