Zen Technologies Q2 FY27 Results (NSE: ZENTEC)
Signal: Margin pressure
The read
Q2FY27 marks a sharp revenue and margin rebound from Q1FY27, with consolidated revenue up 98.8% YoY to ₹34,513.26 lakh and EBITDA margin recovering 301bps QoQ to 43.1%, but the 1,125bps gross-margin compression from higher raw-material intensity and negative operating cash flow of ₹30,288.86 lakh keep execution quality under scrutiny.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹345.13 Cr | +98.8% | +143.7% |
| EBIT | ₹138.85 Cr | +68.9% | |
| Net profit | ₹89.54 Cr | +50.7% | |
| EPS | ₹9.97 | +50.8% | |
| EBIT margin | 43.1% |
P&L walk
Consolidated revenue increased to ₹34,513.26 lakh, +98.8% YoY and +143.7% QoQ, but raw-material cost rose to 41.7% of revenue from 30.5% YoY; EBITDA margin consequently fell to 43.1% from 45.2% despite PAT attributable to shareholders rising +50.7% to ₹8,954.09 lakh.
Segments
The group reports a single Defence and Homeland segment; the material standalone-to-consolidated gap is visible in revenue of ₹30,924.98 lakh versus ₹34,513.26 lakh and PAT of ₹7,918.55 lakh versus ₹8,954.09 lakh, indicating subsidiaries contributed meaningfully to the quarter.
Key positives
- Consolidated revenue rose to ₹34,513.26 lakh, +98.8% YoY and +143.7% QoQ, reversing the prior quarter's ₹14,163.84 lakh base.
- EBITDA margin recovered to 43.1% from 40.1% QoQ, while finance costs fell 44.5% YoY to ₹113.13 lakh.
- The order book stood at ₹1,375.70 crore, providing visible execution support beyond the quarter.
- PPE increased to ₹16,734.00 lakh and CWIP to ₹1,942.03 lakh, while depreciation rose 52.7% YoY to ₹872.63 lakh, indicating asset additions are beginning to contribute.
Key concerns
- Raw-material cost increased to 41.7% of consolidated revenue from 30.5% YoY, compressing gross margin by 1,125bps; revenue grew 98.8% while material cost grew 172.0%, indicating incomplete cost pass-through.
- Operating cash flow was negative ₹30,288.86 lakh despite ₹13,373.27 lakh of half-year PAT, with trade receivables rising to ₹47,888.35 lakh and inventories to ₹34,258.59 lakh.
- Standalone EBITDA margin fell 1,583bps YoY to 36.1%, materially weaker than the consolidated 43.1%, suggesting subsidiary contribution is supporting group profitability.
- Other income declined to ₹1,671.24 lakh from ₹2,530.67 lakh YoY, so the PAT increase was primarily operating rather than treasury-income led.
Research and educational content only. Not investment advice.