Zen Technologies Ltd (NSE: ZENTEC) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Hari Haran Chalat — Chief Financial Officer
Ashok Atluri — Chairman and Managing Director
Analysts:
Unidentified Participant
Abhishek Mehra — Analyst
Sanjeev Zarbade — Analyst
Vikas Singh — Analyst
Dipen Vakil — Analyst
Ashish Soni — Analyst
Amit Dixit — Analyst
Jatin Jadhav. — Analyst
Mehul Panjwani — Analyst
Presentation:
operator
Good day everyone and welcome to Zen Technologies Limited Q3FY26 earnings conference call. All participant lines are currently muted and this session is being recorded. Good day everyone and welcome to Zen Technologies Limited Q3FY26 earnings conference call. All participant lines are currently muted and this session is being recorded. The management is with us today to share their update on the quarter. Once their remarks conclude, we will open the floor for questions. I would like to remind you all that everything said in this call that reflects any outlook for the future which can be construed as a forward looking statement must be viewed in conjunction with the risk and uncertainty that the company faces.
Please note that this conference is being recorded. I now request Mr. Abhishek Mehra to lead the discussion. Over to you.
Abhishek Mehra — Analyst
Welcome everyone and thank you for joining this Q3FY26 earnings conference call of Zen Technologies Limited. The results and investor updates are available on the stock exchanges. In case anyone does not have a copy of the same, please do write to us and we’ll be happy to send it over to you to take us through the results of the quarter and answer your questions.
operator
We have with us today Mr. Ashok.
Abhishek Mehra — Analyst
At Louri, Chairman and Managing Director, Mr. Hari Haran Chalat, Chief Financial Officer and Ms. Abhilasha Atluri, Investor Relations. With that said, I’ll now hand over the call to Mr. Hari Haran Chalar. Over to you sir.
Hari Haran Chalat — Chief Financial Officer
Good evening and a warm welcome to all. Thank you for joining us on our Q3 FY26 earnings call. It’s my pleasure to take you through our financial performance for the quarter. Zen has delivered a resilient performance for the quarter, reporting a 16.8% growth in consolidated revenue and a healthy profit after tax growth of 30.6%. Despite headwinds in terms of the timing of the order inflows of the last nine months, the profitability for the quarter is driven by favorable product mix and a continued focus on cost discipline. Consolidated revenues for the quarter stood at 177.8 crores, which is a growth of 16.8% year on year and 2.4% sequentially.
Operational EBITDA for the quarter stood at 66.8 crores, reflecting a year on year growth of 51.1% and a sequential increase of 3.2%. Operational EBITDA margin stood at 37.6%, higher by 870 basis points year on year and 30 basis points quarter on quarter. The quarter on quarter growth in profitability was partially offset by higher employee benefit expenses which was driven by the recognition of salary areas following the completion of our annual appraisal cycle. Across the group, increased ESOP expenses on account of fresh employee stock grants and a one time impact arising from the implementation of the new labor codes.
As a result, the profit after tax for the quarter stood at rupees 55.7 crores. Profit after tax as a percentage of revenues was at 31.3%. Now coming to the year to date, consolidated performance revenues for the nine months FY26 was at Rs. 509.6 crores, a decrease of 21.4%. Year on year, operational EBITDA stood at Rs. 196.2 crores, a decrease of rupees 39.3 crores or 16.7%. Year on year, operational Ebitda margin was at 38.5% which was higher by 220 basis points. Year over year, the consolidated profit after tax stood at 170.68 crores, which is lower than the same period last financial year by 8%.
Profit after tax as a percentage of revenues was at 33.5%. Now coming to the order book. As disclosed in the investor presentation, Zen has received orders aggregating to rupees 931 crores in the past four months. The consolidated order book position as at 31st December 2025 was 1082 crores and as on 31st January 2026 was rupees 1427 crores. The liquidity position of the group continues to remain Strong with around rupees 1188 crores available in cash and cash equivalent and a net debt position of 0 as at 31st December 2025. This is the brief highlights of our financial performance up to Q3.
We can now take questions. Thank you.
Questions and Answers:
operator
Thank you, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may click on the raise and icon from the participant tab on your screen. We request participants to restrict to two questions and then return to the queue for more questions. We’ll wait for the question queue to assemble. We request all participants please click on the raise end icon to ask a question. We’ll take our first question from the line of Rajamohan Vaikuntharaman who is a professional advisor. Please go ahead with your question.
Unidentified Participant
Yeah. Thank you for the opportunity. Am I audible?
operator
Yes. Please go ahead.
Unidentified Participant
Yeah. Thank you once again and congratulations on the order wins for the last quarter. They were pretty heartening in terms of the visibility that you had given us. My first question is based on your expectation of executing 6,000 crores in three years, most of which would happen in FY27 and 28, you had indicated to having capacities to execute up to 2000 crores annually. Currently in FY28, when you look at the math based on your execution plans you would have to execute in excess of 2000 crores annually. Could you give an overview of how do you see capacity expansions happening in terms of annual revenue executability post expansion? Like currently it is 2000 crores.
So post the expansion what would be the capacity in terms of annual execution then the capex involved and the time frame.
Ashok Atluri
Thank you Rajman for asking the question. And you know, just to you know, recap what we have been saying that you know, FY 26, 27, 28 we had indicated that we would be able to do a turnover of 6000 crores. And based on that, the question from Rajbone is if you were to execute, you know, whatever the execution will do you have the capacity to execute the remaining 5,000 plus crores. So you know, at this point in time we are revisiting the, you know, our order book and the future and you know, what we have said is that this year, if you are not to take this at the base here but the last year as the base year and you assume that 50% growth in the next two years, even though it would be about 3,300 or so, but we expect about 4,000 crore of execution, we are actually scaling down our targets at this point in time.
And with respect to the 4,000 crores, you know, that we are the new target that we have set for ourselves, we do think that, you know, even if we were to execute some part in the FY27 and the major part in FY25, we do have the supply chain to take the order book and execute the order book. So yes to your question that you know, we already have scaled up with our supply chain that this 4,000 crores kind of ability. But what if the orders are much larger? I think as we go into the next year we are building additional capacity.
We are investing in, you know, both machinery and plant and of course even product R and D facility we are investing. So that should create a good pipeline and also enable us to execute the orders if the FY28 becomes very large.
operator
Mr. Rajiv Mohan, please unmute your microphone.
Unidentified Participant
Yeah. So Mr. Atluri, based on your answer of 4,000 crores that you are expected to execute over the next two years. Can one presume that around 1500 crores would be what we would achieve in FY27 and say another 2500 crores in FY28 and you would be able to have the capability to execute over 2,000 crores, that is 2,500 crores in FY28.
Ashok Atluri
Yeah, that’s right. I think I wouldn’t give the exact figures between the two years but yes, I think you are right. On the scale that you know between the two years we should be executing and if we were to exceed 2000 we should be able to execute. We should not have any operational challenges in delivering the on the order book.
Unidentified Participant
Okay, my second question is again a strategic perspective from someone who’s sitting at a vantage point. When we look at anti drone and simulators in general with nuances like hard kill combat training zones, naval air force simulators, etc. Could you give a top level view of what kind of budgets India has been historically running on and how much growth over that one can expect over the next three to five years.
Ashok Atluri
So you know, in the case of training simulators they have, you know, the training have preparedness, you know, thanks to the current situation world over the, you know, at least six, seven years back nobody would think about war happening. And then you know, 20, in 2020, the Armenia happened, then Ukraine, Russia happened. Now, now I believe There are some 20 wars going on and one war which we people could never imagine is between you know, Thailand and Cambodia. So everyone is, I don’t know everyone is fighting or itching to fight but you know, so suddenly preparedness has become very, very valid.
And you know in that case in the, in Indian, in Indian, Indian scenario also Indian government is really, really going to, you know, scaling up and they are allocating large funds for the training budget and of course they are also and with respect to the anti drone systems, you know, we have seen, you know, as you see the more than you know or this 300 crores worth of upgrade order operational requirements for immediately required and then the hard kill requirement has come. I think this will be almost on an emergency basis. The procurement will keep going on.
So to your question, I think not only in India but worldwide, both these segments, the training segment and the anti drone segments are scaling up. And to your question, how much funds are being allocated? You know that, you know that’s a figure that you know the government has not shared with us. So you know, but we think this is much, much more than what we are estimating for the, for what Zen will be getting the orders for, it’s a much larger figure. You know, I would say that running into thousands of crores. So yes, I think there is.
To your, to your question whether there are enough allocation happening for what Zen is planning, the answer is yes.
Unidentified Participant
Can I squeeze in one last question?
Ashok Atluri
Please, go ahead.
Unidentified Participant
Yeah. Generally when you look at this ANA wave acquisition that recently happened and in synergies with say AR IPL which you previously acquired, what is the outlook on naval and hence associated simulation? Assuming is it basically as a combination ANABM and arpl, are they carrying you into a different dimension of sorts? So objectively, when we look at the cost combine, can it evolve into a, say find a crore entity over the next three years or four years or whatever.
Ashok Atluri
So you know, one thing is that, you know the, in the training segment, you know, one of the order we executed we got was something called as combat training node for 100 plus crores. And that’s actually a breakthrough thing that we have been trying to market for almost, you know, a decade telling to everybody that this is how integrated training between various, you know, arms of the army is carried out. So this is a very, very big thing in the sense it is the first order that we got. And this is, this will become a showcase not only for India but worldwide.
And we think, we think personally think they will sell in tens of, if not hundreds of, in hundreds. So you know, so this is only for the army. A similar thing for the Navy is also on the way that we are creating a completely full fledged integrated naval training center. And with and ENAB actually had two of the very, very crucial simulators that we were trying to build ourselves one way. One is called the tactical trainer, second the submarine simulator. Both of them have been developed and delivered so that it’s. So then they’re very, very complex simulator.
And as we are speaking the innovative simulator for tactical trainer and submarine are having a huge demand in the OCS market. In fact we were in ITSEC in us that’s a world’s largest simulation exhibition. And there was almost, you know, there are a lot of interest in this innovative simulator that you are saying. So you know, so what is the synergy being unlocked by the combination of NAV and ARI is that, you know, the gentleman who’s heading NRV was Commodore Aluvalya. He has become the chief technology officer across all the naval effort and air force effort.
So even though he’s a naval officer, he’s an aviator. So, so he’s in addition to doing the efforts with respect to naval simulator and complete set. He’s also building air force simulator. And so I think to your question whether it will be fine. We already are, you know I think crossing 200 crores or something like that. But I think 500 crores will be a very conservative estimate. In three years it will be very, very conservative and we are very, very, I mean happy that these both the acquisitions have very, very synergistic. Thanks for the question Rajma.
Unidentified Participant
Great. Mr. Glori, thank you very much. Best wishes.
operator
Thank you so much. We’ll take our next question from the line of Balakrishna of Oman Investment advisors. Please go ahead with your question.
Unidentified Participant
Yeah, hi, good evening. Hope I’m audible.
operator
Yes please.
Unidentified Participant
Yeah. So regarding this guidance of 4,000 crore in the coming two years. So now how do you plan to achieve by introducing some new other products or some acquisition as we are sitting with the approximately thousand crores of cash. So we had a lot of acquisition in the past. So how this will shape up.
Ashok Atluri
So the visibility for the, you know, 4,000 crores, you know we, we have a strong, I mean the way we are looking at is that we were saying that the order book would be about 1500-2000 crores by the year, by this financial year. And we still are very hopeful that it will happen if maybe there will be a slight spillover. But you know, the way we are seeing things, I think that that looks very likely. So the you know, the 4,000 crores looks reasonably, we look reasonably confident at this point in time and we are hoping that you know, it exceeds that by a larger number.
And with respect to the, you know, are there any future acquisitions since we are sitting on you know, almost 1100 plus crores of cash, the answer is yes. We are looking very aggressively for investments and not only in India but overseas. We talking to various companies and again you know if you see this, EU and eu, the FTA with EU is a very, very big deal for India and it’s a bigger deal for Zen Technologies because we know the simulator that we have are absolutely world class. The anti drone system that we are talking about are also very, very highly advanced.
And the amount of R and D that we are doing currently in both these segment is staggering. And if we are able to actually, you know, pull it off, we get a proper access and we are able to tie up with the EU partners, this thing would be very, very big. I, I mean, you know, I think we look forward. This is a fantastic move that the government of India has Done. And companies like Zen will benefit tremendously from it. So yes, we are also and this will because we have the, you know, gunpowder to actually go and expand our marketing efforts into Europe.
This also gives us opportunity to buy companies which have deep technologies which can be used both to sell overseas as well as back in India.
Unidentified Participant
Good sir, Good to hear that. So regarding the order book execution. So we have completed that one order within the before the timeline. So the existing order book also. So we can expect maybe as it is a 12 months timeline, but still maybe we can expect it to be executed six to nine months time frame.
Ashok Atluri
Yeah, I think most of it should be executed within the timeline. And we think that with respect to the. So if you do the annual maintenance contract don’t get executed. The complete order book will not get executed. So if you see there will be differentiating between the equipment and the. The actual AMCs and the AMCs annual maintenance contract are typically between four to five years of execution. So on an average they may get probably absorbed in three years. So with this. Yeah, I think otherwise typically we. We should execute most of the order book by 18.
Within 18 months.
Unidentified Participant
Lastly, answer any new products? So other than the ads and our simulation one. So we are talking about naval also. So do you see any other big product like ads that is in cord or in pipelines and also about naval products futuristic number how big it could be? We can say that it could be near to equal to ads or any. Can you throw some light on the upcoming products or the new products which are getting matured.
Ashok Atluri
So to your question, is there any big blockbuster product like ads? The answer is no, that’s a too big a product.
Ashok Atluri
So.
Ashok Atluri
But your question, you know, are we launching some new products? I think they’re going to be very, very interested. Interesting launches in the next I would say one year. So I think. But I don’t want to preempt my team by saying what they are going to be. But I think some of them will really literally blow people away and we expect them to be launched in the next few months. So keep tuned in. So you know, again the thing is Zen is not a company that’s trying to go and tie up with people and try getting the technology and manufacture here.
We don’t believe in that actually. We don’t think that we should be manufacturing coolies or so called assemblers for. We don’t want to be a Foxconn, we want to be an Apple. So you know, how do we actually create new products? The extreme R and D that is going on is again not to create a me too product, but absolutely cutting edge world first product. That’s what we are putting in effort for. So yes, to answer your question, yes, there will be new launches. But you know, it’s too. I cannot reveal at this point in time.
Unidentified Participant
That’s all from myself. Thanks a lot and all the best.
Ashok Atluri
Thanks Bala. Thank you so much.
operator
Thank you. We’ll take our next question from the line of Sanjeev Zarbade of antique stockbroking. Sanjeev, please go ahead with your question.
Sanjeev Zarbade
Yeah.
Sanjeev Zarbade
Am I audible?
operator
Yes, please.
Sanjeev Zarbade
Yeah. Thank you.
Sanjeev Zarbade
Sir, I was, my question was regarding.
Sanjeev Zarbade
The simulator order that we were expecting for quite some time.
Sanjeev Zarbade
That was part of the non emergency ordering process and probably that was the reason it has been kind of delayed. So I was, I needed an update about how, when, what are, where are we in terms of that ordering status. You know, a long time back I had given example of Angulimala in one of my annual reports. You know, have you heard about Angulimala?
Ashok Atluri
I don’t know. Very quickly I’ll recap the story. Angulimala was a famous dacoit who used to kill people and he was waiting for and he had a Angulimala. He would cut the thumb and put a garland of that around his neck.
That is the Angulimala. And but you know, when then one day Buddha was passing through and he decided to kill Buddha because he was the last person to, you know, complete his garland. And when he started running after Buddha, he ran very fast. No matter how fast he ran, Buddha was almost one step ahead of him. But Buddha was walking. So I think we are having the same feeling here in this, you know, in the simulator order with regular budget where we are running very fast behind it but it’s maintaining equidistance from us. But you know, again to be fair, you know, on the lighter side but on to be fair that I think we expect again know between without holding us responsible, things are moving in that direction and we expect by before in all probability before March.
It may come but you know, but it may be lower to the next first quarter. But looks like things look like that by, by before March the order may be placed on us. Yeah, and so that’s. That’s with the simulator order. But again with this delay was caused by the operational crisis the government faced. But I think that’s been resolved now. Things are moving a little faster than they were before. Yes. My second question was on the, you know, the kind of situation we Faced.
Ashok Atluri
In the first half wherein we had.
Ashok Atluri
A weak order book to start with.
Ashok Atluri
In FY26 and that led to muted first half.
Ashok Atluri
So what are we trying doing from our side to de risk our financials.
Ashok Atluri
From this kind of volatility in order book.
Ashok Atluri
So you know the thing is that you know as of now we have order book and it’s building fast. So you know, so I, I think in the immediate future there is no crisis. But your question in future what are we trying to do is one thing is we are really ramping up our export efforts so that you know, even if the Indian orders get delayed we start keep getting the export orders and you know we are hoping that the new, the defense acquisition process to 2026 is going to be released very soon. I think that the draft will be released anytime and that will enable us to execute or get orders in a faster time or procurement cycle that I think will actually kind of the export market and the faster cycle and the emergency procurement we expect them to continue for some time all put together I think will probably not create a situation where our order book has depleted.
I think I, I think you are very right in the sense Sanjeev that you know your question is if the odd you are never in none of our investor doubt our capability to execute the order book but if the order book itself depletes, you know what can we do? I think that’s, that’s a very a sticky position to win. We hope we will not get to that position again.
Sanjeev Zarbade
Right sir.
Sanjeev Zarbade
And what would be the AMC portion in our order book?
Hari Haran Chalat
The AMC portion as at 31st January out of the total order book of 1427 crores is 338 crores.
Sanjeev Zarbade
Okay sir, that’s it from my side.
Sanjeev Zarbade
Any further questions, I’ll come back.
operator
Thank you.
Sanjeev Zarbade
Thanks.
operator
Thank you so much. We’ll take our next question from the line of Vikas Singh from ICICI Securities. Please go ahead with your question.
Vikas Singh
Thank you for the opportunity. Am I audible sir?
operator
Yes, please go ahead.
Vikas Singh
Yeah. So my first question pertains to our revenue target Visa vis the order book. In order to get that 2,000 or 3,000 kind of the range we would have running or need to have a running order book of 2000 crore. Currently we are at thousand crore. So just wanted to understand which are the new segment or pockets which you are targeting and are a little bit on the confidence level of to get this in the next eight or ten months to get the order book to almost 22 and a half thousand crore despite being thousand to 1500 crore of the execution targets as well.
There’s a. Seems to be a little bit tall figure. So just wanted to understand which segments are actually new to us, which we are targeting and what are our thought process or confidence.
Ashok Atluri
Yeah, so. So because thanks for the question. So your, your question is that you know we have an order book of about 1400 crores and out of that about 1100 crores is equipment and 300 crores is, you know, three plus is a. How will we execute 1500 crores in that question. So I think the order book will position will improve I think pretty soon to about. I know what we are saying about the simulator etc orders. It should go to 2000 crores and we should be. You should be able to see that, you know next year, you know we should be.
If we execute as per the timeline, we should hit the target that we are envisaging for the next year. Our thing is, you know, how do we the order book should by the next financial year end the order book should again, you know should be around 2,500 to 3,000 crores to actually hit the complete target of 4,000 crores. Right. So you know we’ll have to wait and see for that. But as of now for the next year things look very bright for us.
Vikas Singh
Yeah. So just let me just slightly rephrase this question. Out of this 2000 crore of execution, what portion do you think would be coming from the simulation which is your previous business where you are on top and what portion do you think from the new segment like electronic warfare drone component? Because that is where the growth path is for you incrementally. So if you could just highlight that.
Ashok Atluri
So I think we will continue to be little heavy on simulators as of now given the order book that we have, we’ll have a little heavy on simulator and the expectation. But again the growth that may come from Antidote System may be much, much higher. And the way the government is going and the way we have been able to get the orders again a lot of people are claiming that they have got the orders and all that. But the centralized orders under which heavy screening goes and actual capabilities are seen, especially the track record of the company seen.
And as our investors know, the Zen simulators were actually tested in at, you know, at the operational crisis level. So given this, that’s why we got an upgrade order and we also got a new order and also we got an order for hard kill. Now this is a combination that’s not, that’s not there. At all. So given these things that and, and the actual threat the nations are facing, including India, from drones, this is absolutely, you are right on track that you know, this will actually grow. But as of now what we see immediately is that this is.
The simulators are also very, very large.
Vikas Singh
Noted, sir. So my second question pertains to our standalone versus subsidiary performance. So if I see that our standalone performance is obviously because of want of order was down while subsidiaries was going up. Just wanted to understand that since subsidized margins are less right now. So what is our thought process on the incremental margins coming from subsidiary bringing out the total consolidated margin targets for FY2728?
Hari Haran Chalat
Yeah, so. So because most of us have said the acquisition that we made for Ari, we are still in the process of integrating it into our operations. So Ari on the standalone basis delivers currently around 25%. As Pat, our target is once the complete integration of Ari is done with the operations, it will average closer to what Zen averages in the long term. And so most probably the small dip in the consolidated performance that you’re seeing currently would go away once the complete integration with Ari is done.
Vikas Singh
And by when we are expecting this.
Hari Haran Chalat
So most probably you would see that coming in, in FY27 itself, the impact of the integration with Ari.
Vikas Singh
Okay. And for this electronic warfare and drone business, given the competition is hitting up there, our long term assessment is would the margins would to match our current or usually logically should be on a lower side. Right. So how should we look at the margins there once you achieve your targeted level of production and sales?
Ashok Atluri
So I, I think, you know, we are the anti tone system. Margins have been lower, you know, historically than simulators because that’s a new product we got into and there was competition at that point in time. But as we see that, you know, the gap between us and the competition is growing every day as we add more and more features. You know, it started with just a soft kill, but then we added spoofing. Now we have added a hard kill and now we, as we go ahead we adding a lot of other things. You know, again as I was saying that the new products coming out in this regard.
So I think the, you know, but very frankly as you see, your intuition may be right that there will be margin pressure on us. But will we be able to maintain the, you know, the predicted 25 pat margin at a, at a, at a consolidated level? I think we feel confident about that.
Vikas Singh
Notice that’s all from my side. Thank you for asking. The Question.
Ashok Atluri
Thank you, Vikash.
operator
Thank you so much. We’ll take our next question from Deepen Vakil of Philip Capital. Please go ahead with your question. Hello.
Dipen Vakil
Hi.
operator
I’m audible yes please.
Dipen Vakil
Yes. So also first of all congratulations on great set of order wins. So my question is first is so you mentioned about the emergency procurement orders coming back after the previous tranches. So anything where we are participating or any order pipeline in near term which could further boost our orders.
Ashok Atluri
So yeah, in with respect to simulator order we are expecting some order depend I think probably, you know, again I was thinking by March, but you know, we never know the pace of the government and their compulsions. So based on that the order book should improve significantly in the next couple of months. And after that we know that lot of very large inquiries are coming for, you know, for the anti drone systems and even training equipment. So I think yes, the pipeline is very, very strong.
Dipen Vakil
So you also mentioned about opportunities opening up from the export area. So what kind of contribution can we see, see starting say maybe from FY27 onwards. I know understand that it will be like a marginal start, but what kind of a contribution can we expect from like geographies like US where you have presence and also now EU or Middle east opening up. So what kind of contribution can we expect from your export region?
Ashok Atluri
So you know, we, we definitely can see lot of, you know, we actually can visualize some orders coming from Middle East, Africa and Southeast Asia. And I again, you know, I don’t want to put a number but I, I think it may be anywhere between 20 to 30% of our total turnover. So yeah, especially for FY28 I would say. So those things are really being negotiated. And you know, fortunately our standing in the international market is very good as a country and they like companies that have the IP control because you know, again, they are also worried like many other countries that what, what backdoor software is there, what kind of, you know, you know, nobody would believe a company, you know, country like China to their software.
So but in our case we have, you know, India has that standing that, you know, the morally we are not, not a company, not a country that let down any of our allies. But again, you know, we have seen that if you don’t own the ip, pagers can become bombs, you know, nuclear reactors can be compromised. So it’s a big challenge that so, so for the export market we, we think it’s going to be very big number, especially in FY20.
Dipen Vakil
Got it sir. So now just a small bookkeeping Bookkeeping question, sir. Can you help us with the order book split between simulators, anti drone and overall export orders on. In the order book?
Hari Haran Chalat
Yeah, yeah, yeah.
Hari Haran Chalat
So as at 31st January, the order total order book is 1,427 crores. Out of that, the anti drone system and simulators are equally distributed of 50, 50%. And between domestic and exports are domestic. It’s more heavily inclined towards domestic. So domestic is around 93% and the exports will be around 7%.
Dipen Vakil
Got it, sir. So that’s all from my side. Thank you so much and wish you the best for new automobiles going ahead.
Ashok Atluri
Thank you.
operator
Thank you so much. We’ll take our next question from Ashish Soni of the family office. Mr. Ashish, please go ahead. Please go ahead with your question.
Ashish Soni
First question. I think initially we were thinking that it will be 5000 crores order book in next two years. So what changed? Because it got decreased. What are the factors, if you can. Just.
Ashok Atluri
So you know, one thing is that the order book, Ashish, that, you know, we were expecting a lot of orders to come in the area of simulators and you know, the regular procurement, had it gone on and the pace at which it had gone, we, our order book would have been very, very high, you know, so that we probably would have still been able to say that, you know, we are, we are on with the target. So what changed is the pace at which government was, you know, processing the orders. The orders got delayed in the procurement and that’s why this year got hit and you know, the next year also we, we had to readjust the base year, you know, to the previous year.
So I think that is the reason we, we, we, we had to reduce the thing. But again, you know, as we are being cautious here, we hope that, you know, we, we are wrong in this case and you know, we do much more than what is being projected.
Ashish Soni
And second question is on the thing you wanted to set up a manufacturing in US for especially to cater to NATO countries. And now with this sort of FTA getting a green signal, would it be better that if we try to export from India, is it possibility for at least for the European Union countries? And now with all these tensions across with US and NATO going on. So just, can you throw light on the US as well as this part, if at all?
Ashok Atluri
So, you know, yeah, I think Ashut, you got the thing right. Your intuition is right in the sense that, you know, we, the US thing is not going as fast as possible. We have built a team there and we are interacting with them and trying to. We have technologies that they want, you know, they have came, they came, saw and they said we are very keen on this. So we are complying with their lot of regulation. They, you know, they’re highly regulated defense economy. So we are getting ourselves registered with the appropriate authorities. But the EU FTA came as a fresh breath of air for us and we are actually talking to consultants and all.
It’s just declared a couple of weeks back. So we really, really are now looking at the EU as a probably the base from which we can operate for the NATO and but again, you know, US market is very huge. I mean it’s not as market to scoff at. So U.S. efforts are going on at this point in time. But if things work out better for us in the EU market which we will be doing in the next couple of months, we have a clarity we would like to set up there. And again we also are looking at targets in the EU market which we can acquire and enhance our bouquet of offerings.
Ashish Soni
One last question. Israel, I think Nathalia said that they want to trust only India, US and Germany for their supplies or weapons. Do you think any possibility for us to work with Israel specifically in this area based on the statement which came recently, I think last week from their prime Minister.
Ashok Atluri
So you know we have never worked with Israel. You know, we never did any deal till now. We have never done anything with them and you know, we let us see if there is any opportunity that presents us. It’s not that we don’t like to deal with Israel but you know, we are a company that is focused on creating our ip. I think Israeli companies like people who want to do manufacturing but are not technically capable but you know, we are not there. We may not fit their idea of an ideal partner because we want to really make India Atman Erbal in the proper sense.
Not just manufacturing facility but creating the ip, owning the IP and working on creating next generation of product.
Ashish Soni
Okay sir, thanks and all the best.
Ashok Atluri
Thank you.
operator
Thank you so much. We have Amit Dixit of goldmatch Sachs with his question. Please go ahead.
Amit Dixit
Yeah, good evening everyone and thanks for the opportunity. A couple of questions from my side. A few quarters back we introduced three or four products like barbaric prahas etc. So just wanted to get an idea because of the focus of the government on AI driven platforms and there are a few players who are thinking of putting up such facilities and we have a head start. So first of all, if you could elaborate on the opportunity that you see overall in this space and how far we have progressed on the development of these products. That is the first question.
Ashok Atluri
You know, these products are, you know, by, managed by our associate company, AI Turing. They have a trio, you know, Abhishek, Komal and Tushar who manage the company. And you know, very frankly we think the, what they have created, absolutely marvelous. And to your question, you know, where are they? When I said that we have, we got the hard kill order for including anti drone system, shooting down the drones, it is their product that was part of solution. So you know, we have, we have started selling their products and we think that they are also on the verge of getting lot of orders.
So by, by the next FY27 you will see they will make a meaningful contribution to our overall revenues and profits.
Amit Dixit
Okay, that’s nice to know because at that time, you know, it was supposed to be the next vertical for us in terms of earnings apart from anti drone and simulator. The second question is essentially on European FTA and you mentioned in your prepared remarks that you see opportunities over there. So is it possible at this stage? I know it’s still very, very, very early, but if you can highlight some of the platform stroke products that we would be kind of, you know, targeting in that region because some of the companies particularly in Radar electronics who have their own ip, they have got a head start over there.
So just wanted to understand from your perspective because you are also an IP driven company, so what kind of opportunities you essentially see over there. And I’m talking about medium term here. I mean not something quarterly basis or something like that.
Ashok Atluri
So in medium term, you know, when you’re talking about, I’m assuming at least two, two to three years is what would be qualifying there. I think yes, we are the, the again the, you know, people. The Europeans also love the fact that no IP is owned. They can, their technology is completely owned by India and they want to deal with us. And they, we think that the technologies that are anti drone system and simulator, which are our, you know, mainstay both have a huge market in, in the, in Europe. And you know, one thing very interesting is that the, you know, you, you know, the Europe at present in the.
Is perceiving Russia as the biggest threat. So you know, when they want to really prepare with you know, Europe versus Russia kind of a thing situation. We have India owns Russian equipment and simulators that we have are mostly Russian equipment simulator. So they actually can do a full fledged war gaming with our simulators and their simulator and Again you know we can make simulators for their because the engines, the underlying them are, have the same physics, you know, different tanks but you know, so we can moderate them, change, modify them. So now if they want to try out how will our simulation work against Russian equipment? We are there, you know, we are exactly the exact fit for them for the future needs.
So I think in addition to the anti drone system even simulator market is going to be very huge and you know we are going coming up with offers that they may like where we know we don’t mind doing a service based offering also there. So I think yeah, to your question, they would love to have a IP owned solution there rather than somebody just pushing someone else’s solution.
Amit Dixit
Okay, thank you. Thanks a lot and all the best.
Ashok Atluri
Thank you.
Amit Dixit
Thanks.
operator
Thank you so much. We’ll take our next question from Jatin Jadav of Sahasarar Capital. Please go ahead with your question. Please unmute your microphone, Jatin.
Jatin Jadhav.
Am I audible now?
operator
Yes please.
Jatin Jadhav.
First of all, thank you so much for the opportunity. Most of my questions have been answered but I still have a few. Out of curiosity, can you describe in an unclassified or a non technical term how Zen Technologies counter UA suite is designed to detect, track and classify threats under the presence of let’s say an enemy electronic warfare situation? I’m, I’m basically highlighting the Venezuela situation wherein the enemy was doing electronic warfare on our system. So how, how does Zen plan to counter that or our counter US system?
Ashok Atluri
So you know the, what we understand is that there was a huge awe and shock kind of a thing which was sent and they know they not only utilize the systems but it also neutralize the people, you know, the bleeding ears etc. So if such a thing is done, was done to us, probably most of the electronics in India would also have been frozen. But you know, now that we are aware of it we are building capabilities that you know these kind of things do not damage us. And we are also, I think in India we are also developing similar products which if they, if we are, we, we can also retaliate with equal or, or more force, you know, disabling their situation.
But again, you know what we have been doing is we started with basic, you know, range of, you know, the commercial drones neutralization. But most of the companies are stuck. Even now they’re still neutralizing only commercial drones frequencies. But Zen has gone beyond that. We started with wideband, we said the commercial will not do non commercial also need to be jammed. So we started between 406 GHz today we have gone from 100 or even 70 MHz all the way up to 12 and 18 GHz. So it’s almost becoming band agnostic. We are not caring where it is coming from, but we will be able to jam them.
So we are capabilities are being built and I think if a Venezuela like situation happens we should come out on top it were to happen now.
Jatin Jadhav.
Thank you. My next question is how does the system distinguish between genuine and deceptive inputs as false radar tracks, RF signature? Do we employ multiple sensor fusion and then basically figure out where the real target is or how do we do it?
Ashok Atluri
So you know, the thing is because you know again, whether it’s a urban area, there is a lot of noise, there is a lot of false alarm. So but we have over a period of time done a lot of AI based programming and we are able to suppress false alarms and the actual alarms are being shown. So the drone threats, if they are fake, they are completely ignored and so that, you know, person because otherwise if too many false alarms are there, they kind of become inured to that immune system and we stop noticing them.
So the only way to do it is actually based on the operational feedback. Keep improving the algorithm so that the false alarms are suppressed and the act genuine, the signal is actually recognized and communicated to the operator.
Jatin Jadhav.
Got it, got it. Just one small question. Since we have a very good capability of developing virtual environments for various kind of products, can we somehow use that capability to generate a environment which is infused with a lot of electronic warfare zones, probably for simulating our own drones, our own missiles, how they act in that particular terrain or in that situation. Is it possible?
Ashok Atluri
Yeah, yeah. So the complete, you know, it’s called a war gaming kind of environment where people are fighting war with each other. And typically it may be just map based, but most of the time what we are enabled is we are saying don’t just play on the map, but actually have simulated tanks being moved, artificial AI tanks being moved with actual tanks, integrate them with the actual tanks. So yes, this is absolutely possible and this is the solution. The combat training node is a step in that direction that we have offered and that’s absolutely the number one in the world in terms of what we are offering.
And that’s going to scale up now and most of the countries are going to ask this question. That is your virtual simulator integrated with live simulation and war gaming simulation. So yes, we are absolutely there and that is what we think will drive our future growth.
Jatin Jadhav.
That’s pretty much it. It’s a pleasure to know that. Thank you so much and all the best.
Ashok Atluri
Thanks Jatin. Thank you so much.
operator
Thank you so much. We have mehul Panjwani of 40 cents with his question. Please go ahead.
Mehul Panjwani
Thank you so much for the opportunity. It’s really heartening to see that, you know, Zen is going to be a biggest beneficiary, quite a good beneficiary from the EU deal. So my question is that since we are going to work with the EU closely, would that impact our US opportunities?
Ashok Atluri
No, not at all. Me, I think, as you know, somebody else pointed out, would we be operating from, for NATO from US or from eu? We are very agnostic. So we are with this FTA coming through, it has completely changed. Absolutely new opportunity for us. And I think we are being more openly embraced by the EU as a country than. No. Than us at this point in time.
Ashok Atluri
So.
Ashok Atluri
Yeah, so there’s no, in fact this additional incremental opportunity that has come, the overlap may be executed from either US or from eu, but it’s absolutely a positive development.
Mehul Panjwani
Okay, sir, and my second, my second question is that in the last call, last conference call we had mentioned that there will be an order of orders of 650 crores which will definitely come in H2. And in, in our opening remarks and various responses to the questions, I understand that we are talking about orders of about 1200 crores. So maybe I’m missing something here. So if you can just clarify.
Ashok Atluri
So you know, I think we have.
Mehul Panjwani
Got suddenly, you know.
Ashok Atluri
Yeah, no, no, we have got the orders, I think more than as promised or little more than what we have promised. We have got only ordering somebody, as someone raised that, you know, what happened to your regular order of a simulator? That was the only thing that did not come through. But as I was saying that we should be getting by. But, but otherwise whatever we have said in earlier calls have already been delivered, you know, almost 600 plus crores of either. Recently we got this accurate anti drone system upgrade, new orders, hard kill. And then we also got some simulators, combat training node as a order, then we also got tank simulators again as an order.
So I think we have, I think, I mean if you go through the order, the releases that we have done and we were now we are at 1400 crores. The total order book position is 1427 crores. And so I think that’s a reasonable buildup. I’m not something to really, you know, celebrate over, but I think from what we were three months back to now, it’s a really very good build up.
Mehul Panjwani
Great sir. And sir, how long will it take to execute this orders worth for 1400 crores. So.
Ashok Atluri
Yeah, so I. I think you know what we have seen that out of that equipment is about 1100 crores. So you know most of the equipment order should be executed in the next 18 months.
Mehul Panjwani
Okay.
Mehul Panjwani
So.
Mehul Panjwani
So are when will our numbers of the top line getting start getting impacted from which quarter onwards?
Ashok Atluri
So no, no, I will, I’ll not say but next year will be definitely much, much better than you know. I think we should record the highest turnover in company’s history next year. I think it will be very big.
Mehul Panjwani
Yeah. Okay sir, thank you so much and wish you the very best sir.
Ashok Atluri
Thank you. Mahal. Thank you so much.
operator
Thank you so much. We’ll take our next question from bride Buttar who is an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Congress on great set of numbers. My first question is how big are the orders in size expected from exports? Like what are the size that we’re looking for? Like how big are they going to be compared to Indian orders? And the second question is what happened with the Orlando Expo of simulators. Like did we get any, like did they show any interest or anything from our simulators?
Ashok Atluri
So, so what was your first question? Your first question was related to export orders. What is it? What was it?
Unidentified Participant
Yeah, I was. My question is like what are the size of those orders? Like that we are expecting like, like we got like 300 crores and 400 crore order from Indian like mod. So what sizes are there from exports?
Ashok Atluri
Yeah. Okay. So you know the first question is that you know we, we have got all kind of orders. We have got 320 crores. So you know typically in the case of Indian, you know orders that we have got 300 is typically the limit within which the decisions can be done at a you know more reasonable level. As the order sizes increases, goes to 1000, 2000, the approval levels keep going up and they are longer cycles. So that’s why during the Emergency procurement any 300 crore less than order all the typical size were about 300 crores or less.
So we got them. But export there is no such constraint. You know, I mean it could be, you know, 400 crore, 500 crore, even thousand crores. But the kind of orders that we are pursuing are in range from 100 to 800 crores. So you know we could get any of those orders at that point in time. And with respect to the Orlando Expo, this is called the international exhibition for simulation and Training. It’s a itsec. We call it ITSEC for short. It’s based in Orlando and comes the weekend after Thanksgiving, typically the last week of November or first week of December.
So we went there, we saw a lot of military, American military people coming and they were very excited, especially with our naval simulator. They said this is something that they really want. So we have got a lot of inquiries from there and we have the. As you know, ARI already has a huge network even in South America. So, you know, so a lot of people even from South America had come and they seen this simulator that we have. So I think we expect orders even from the thanks to our presence there. But again it will be non US orders that we are expecting faster.
The US orders. Again as I said that there are a lot of regulatory registrations etc process that we need to do before we actually become eligible for the orders. I think we may get EU orders faster than US orders. But let us, let us wait and see how the EU plays out.
Unidentified Participant
Okay, thank you sir. That was, that was it from my side. And good luck for the future.
Unidentified Participant
Appreciate it. Thank you.
operator
Thank you so much. Ladies and gentlemen. That was the last question for today. I now hand over the call to Ashok sir for his closing remarks. Over to you, sir.
Ashok Atluri
Thank you. Swapnil. Hello fellow shareholders and investors. Actually this year, as we have been saying, it’s going to be pretty muted and it’s maybe 20 to 25% less than the next year. But we hope that we will be more than compensating it during the next year. But there have been very positive developments. Government has been giving our emergency orders, they have been giving new product orders like for the Combat Training node that we were talking about. That has been going almost for a decade, but now they really want it. And what we think is with the Indian government taking, there’ll be huge demand overseas also because that becomes a reference site for us and Indian government is very, very open to allied countries to show that.
So we think that Combat Training Node is a big, big win for us. And of course anti drone system, the R and D is going very, very hard. We are trying to meet the operational needs. Again, you know, typically we say that we are not building for an RFP or we are not worried about the rfp. We actually want India to win wars. So what is the product that we need to have even to handle the actual threat? So that way anti drone systems are also working very, very in the right direction. Again, the EU FTA was a very big deal and I think we should be getting a lot of benefit out of it.
I’m very excited and I’m going to Europe and I think in the next earnings call there will be something what, something interesting about eu. And you know, one thing I want to also refer is that you know, the simulators that Zen has, you know, actually saves thousands of crores of rupees. And it is very environmentally friendly in the sense that, you know, you don’t have to fire actual ammunition, you don’t have to take the tanks onto the for the actual exercise. But you get more feedback, more competent skill building happening when you use the simulators and what has happened.
And you know, because of this we also got a very interesting thing for the investors would be you got an ESG score of 67. I mean last year I think we were 41. We have suddenly gone to 67. So this would, this, this is the Dow Jones sustainability index score. I think this is a big plus for us and that will get some investors in the sustainability sector onto into Zen. But again this is just the beginning. The company Secretary Sorrow had done this job single handedly. So we expect to really, really aim at a very, very high score in this so that people who are into sustainability can actually see a rare intersection between defense companies doing sustainability work.
So ESG is the, you know, one thing that we are very excited about. And again, very briefly I want to touch upon the budget. The budget was, you know, 7.85 lakh crores and you know, I think it was a huge budget and the commitment to spend 75% of it on domestic procurement was very good. But you know, again our always thing is, you know, will it be Indian labeled foreign goods or it will be actually designed, developed in and made in India stuff. So this is where government can actually play by setting an example that pretenders and fakers will not get the orders.
The actual IP developers will get the orders. So that could be one very big thing if it happens, you know, otherwise it is, you know, strategic dependence with the Indian label will continue and we’ll never get strategic autonomy. That is one thing that will be missing. So our hope is that money actually flows back to complete the design rather than just get somebody else’s technology and assembled in India. So these were the main points that I had in mind. And one final thing was that you know, there is a research, development and innovation fund that the government of India floated for 1 lakh crores.
Out of that they want to spend 20,000 crores every year onto deep tech. And you know Say and defense is one of the areas that the RDI fund will be using. So this is something some area where companies like Zen will be taking help from the government of India to actually do long term. I mean the fund the government is talking about is actually a 50 year fund, but they will be giving to the Indian companies maybe 10 to 12 years kind of thing. This actually companies that have, you know, that actually do R and D have a long term scope and are willing to put in their money.
So the government is willing to, that fund will be willing to put in 50%. We put in 50% or we raise it from somewhere and put in 50%. We can really go for very, very important technologies for five years, for a five year, seven year, even ten year development. And again, how should we approach this is very simple. What are the technologies five or seven years from now we think will be very important in war? And then, you know, trying to identify the Pareto within them and then double down on the Pareto. So that’s the approach that Zen will be doing.
And I think very frankly, you know, again, every time I come I say one thing. I never been more excited and I want to repeat that. I never been more excited. And I think, you know, India version 2 is going to happen in a rapid way in the coming couple of years. Thank you so much for your time.
operator
Thank you on behalf of Zen Technologies Ltd. That concludes today’s conference call. Thank you for joining us. And you may now click on the leave icon to exit the meeting. Thank you all for your participation.