On Monday, shares of Zen Technologies went down by 20%, closing at Rs 1,079.35 on the Bombay Stock Exchange (BSE). This drop happened after the company announced that its profits and sales decreased compared to the previous quarter.
In the third quarter that ended in December 2024, Zen Technologies made a net profit of Rs 38.62 crore, which is 22% more than the same time last year. This increase was mainly due to higher income from other sources. However, when compared to the previous quarter, profits dropped by a big 40.8% from Rs 65.24 crore. This has left investors worried.
The company’s revenue from operations grew by 44% year-on-year to Rs 141.52 crore, but it fell sharply by 41.44% from Rs 241.69 crore in the earlier quarter. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also dropped 33.18% from the previous quarter to Rs 58.69 crore, although it was up 21% from last year. The EBITDA margin was 35.90%, down from 47.34% last year, but a bit higher than 35.12% in the previous quarter.
Ashok Atluri, the Chairman and Managing Director of Zen Technologies, said that profits went up this quarter because of increased other income. He also expressed confidence that the company will reach an EBITDA target of 35% and profit margins of 25% by the end of this financial year. As of December 2024, the order book was valued at Rs 816.91 crore.
The stock’s fall came despite Zen Technologies announcing investments in two companies: Vector Technics and Bhairav Robotics. These moves aim to improve its capabilities in drones and robotics. The company now owns 51% of Vector Technics and 45.33% of Bhairav Robotics, focusing on aerospace and defense improvement.
Finally, Zen Technologies’ shares have been struggling, losing about 51.72% in just the last month and 35.03% in the last week. In the past six months, the stock has dropped 36.58%, though it remains 33.27% higher compared to a year ago.
Despite this downturn, many analysts still believe Zen Technologies has a good future. According to Trendlyne data, the average target price for the company’s shares is Rs 2,495, with all three analysts recommending a ‘buy’ rating.
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