Zen Technologies Ltd (NSE: ZENTEC) Q4 2025 Earnings Call dated May. 19, 2025
Corporate Participants:
Unidentified Speaker
Ashok Atluri — Chairman and Managing Director
Afzal Malkani — Chief Financial Officer
Afzal Malkani — Chief Financial Officer
Analysts:
Unidentified Participant
Amit Dixit — Analyst
Aryan Oswal — Analyst
Deepen Vakil — Analyst
Presentation:
Unidentified Speaker
To Ms. Tina Virmani from Motilal Oswal. Thank you. And over to you.
Unidentified Speaker
Thank you Sapnil. Good afternoon everyone and thank you for joining US for the quarter four FY25. Earnings conference call of Zen Technologies Limited. We are pleased to welcome the management team of Zen Technologies to this call. Mr. Ashokathlori Chairman and Managing Director. Mr. Abzal Malkani, CFO. Ms. Shilpa Whole Time Director and Ms. Abhilasha Atluri from investor Relations. We will start today’s call with brief overview of company’s performance after which we will open the floor for question and answer. With that I now hand over the call to Mr. Abzel first for the compliance related disclosures and then to Mr. Ashok for his opening remarks. Over to you sir.
Afzal Malkani — Chief Financial Officer
Yeah. Good afternoon. Good afternoon everyone. So the results and investor updates have already been emailed to you and are also available on the stock exchanges. If anyone has not received a copy please let us know. We will be happy to send it over. Before we begin I would like to remind you that today’s discussion may include forward looking statement which must be viewed in conjunction with the risk and uncertainties that the company faces. These are the detail in our internal reports and other public disclosures. We will start today’s call with a brief overview of the company’s performance after which we will open the floor for the question and answer. With that I now hand over to our chairman and Managing Director Mr. Ashok Atluri for his opening remarks. Thank you.
Ashok Atluri — Chairman and Managing Director
Good afternoon to fellow investors and other participants here. So I just. I’m assuming that you have seen the presentation and I will not go delve into the presentation itself but I’ll talk about some peripheral points which may be of interest to the investors. So you know the. One of the questions which should be worrying investors is about the order book position, that order book position. So I have indicated that we should be getting about 800 crores worth of orders by the H1 and I think we still are on to it. In addition to that there may be some other orders which because of the recent operations there may be something additional in that in those areas.
These orders that I’m talking about in course are all simulators. So you know the non. The other segment orders may be activated due to the pressure that the. You know, due to the recent actions that our neighbors have taken against us. And so you know, just to, you know, to understand the antitone system that we have, you know we. We started R and D in 2018. In fact we were the only private Company, to the best of my knowledge, that was discussed. Everybody else was screaming drones. And we were thinking, why isn’t anyone talking about anti drone systems? And this complete silence on that regard.
And you know, we saw the signal in the silence and we decided that we should focus entirely on that. And around that time we acquired uts, a team of extremely competent experts led by Srinivas Raju and Nagendra Prasad. So Dr. Nagendra Prasad and you know, we, our, you know, our bet proved very, very patient. And while they were doing a lot of other projects, we tried to focus exclusively on anti drone systems. And the results have been very, very encouraging. Again, you know, this was a long, four, five year kind of research and it’s still ongoing.
Extreme amount of investment is still ongoing because the threats are evolving, the new threats that are coming are being accommodated in the, in the, in the product. Even though we initially started, the product typically has lot of components. We initially started with detector and Jammer, but later we added the radar which was again created, which is a multi year, you know, at least five, six years of effort which was created in, you know, less than a year kind kind of situation because we were really hard pressed for time. The electronic, optics, everything is now in house.
So we are completely giving a made in India solution to the, you know, design developed and made in India. I always say I hate just made in India because I like design and develop also to be added to that. So yeah, this was a complete design developed and made in India solution to it. And while 20 in the initial year, in the first, the first tender that was floated by the armed forces had by Indian category, you could get a foreign collaborator. In 23, when they floated the RFP they insisted on IDDM. That means to say the, even the technology and the IP in the product should be owned by Indians Indian companies.
And that is where you know, we had, even though initially we had about 12 companies, finally only two companies came for the trials and only one company emerged as a resultant single vendor in that because we were the only company that was able to comply with the requirement there. What were the requirements? The requirements were, you know, very in the sense typically most of the anti drone system in the world handle only two frequencies, 2.4 GHz and 5.8 GHz which are basically commercial frequencies. But the reality is our bet was that, you know, the actual war, when it will happen, it will not be the commercial frequencies that will be tapped, but it will be, you know, it may be any frequency.
So you know, the Little. So we have to develop anti drone system that was band independent, not band dependent. So that is what, that is a solution that we were able to make. And you know, now we have that solution and that solution has been very, very helpful to you know, our armed forces. So I think the bet was very, very early taken early on and we are as we speak, lot of improvements, lot of feedbacks are being incorporated and I think we’ll absolutely have a world class anti Dr. And which will help India to be absolutely unbeatable in any war.
India and its allies, whichever Indian government feels will be supplying to them too. So this is the statement with anti drone systems. Again, you know, we are hearing a lot of statements about anti drone systems but we really have to see whether this is the indigenously designed development and made. Again, we have been tested and we have been proven beyond doubt that we have by the government, you know, where we qualified an IDDM case. So we know that, you know, we have been tested. We have to see any competition in this regard from any other vendor.
So you know, another question was that, you know, the, with respect to I have been always saying that, you know, that the 50 average CAGR growth is expected. The my confidence still is there that the average rate will continue. But again, you know, because of the delay in receiving the order this year may be muted. But again, you know, from 9, 900 to you know, 900 was prediction was made when it was 900. So on 900 if you take that as the base 13502000 and 3000 crores. So it will be little more than 6000 crores in the next three years.
We still feel confident that we can achieve those figures. And again, you know, we have to be as, you know, as a company, you know, this is what we could do. But you know, government we feel should be doing a little more aggressively. You know, in the sense after the pager incident within Israel which happened in which, you know, Israelis gave the pagers to Hamas and activated it after a long few months, probably a little longer than that and they were able to kill them. So we actually believe that lot of these Chinese stuff which is there in India is actually that, that kind of stuff, their cars, their weapons, because they control the software, especially electric cars are very, very dangerous.
At least the government should take control of the software. We think that the, the mobile phones, they’re complete very dangerous. They should look at, you know, probably looking at the software and you know, try to take control of the software. Otherwise we’ll be in big trouble with China. So, and I’m very sure, you know, you might have read the article where even the solar, solar farms can be switched off by the Chinese when they want because they have switch in the panels which can be activated and put off. So, so, you know, I think we.
I’ll open the, I’ll open the floor for question and answer. And if there is now anything, you know, that any clarification required, I’ll be more than happy to answer them. Yeah, the floor is open now.
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 hand icon from the participant tab on your screen. We will wait for a few minutes until the queue assembles. Ladies and gentlemen, please stay connected.
Ashok Atluri
I think we should keep in mind that, you know, you, we want to end this in one hour. There will be no extension. So, you know, we, we should retreat that time very preciously and try to close it, you know, see that everybody’s accommodated and can you request the, you know, questions to be, you know, I mean, let them be long but as brief as possible.
operator
So we will take care of that. Ladies and gentlemen, we will have our first question from Mr. Amit Dikshit from ICICI Securities.
Amit Dixit
Yeah. Hi. Good afternoon, everyone. And consolation for a good performance record quarter and record year. I have a couple of questions. The first one is that in the proposed revisions to dap, we have seen that there was a mention of simulators being contemplated for reducing the testing time. Have you seen any traction around that particular aspiration of the government and anything you hear on that front? That is my first question.
Ashok Atluri
Yeah, so the, the simulators are actually now being used in the, in the, in the shipping acquisitions, especially for products where, you know, it’s very, very difficult to do an NCNC because they are actually built to purpose. It’s already there, but I think they want to make it more generic. This is one of the suggestions. You know, DAP was released in 2016 and then 2020. Now they’re, it’s due for revision and the suggestions are coming in. One of the suggestion is, you know, using simulation as a way to do the trials instead of actually doing the equipment.
You know, I have on my own reservations, but this should be, I feel that it should be applied very, very sparingly. And to your question that, you know, what would be our involvement be? We maybe get involved as the opportunity evolves, but at this point in time, we don’t see much role for them to play in this kind of Simulate simulated evaluation.
Amit Dixit
Okay. The second one is essentially on the. Delay in ordering that we have seen. So do you attribute this to the. General delay that we saw last year? I mean because of general elections? Yeah, so. Or is there some more structural element to it? Because we saw few orders, few bulky orders being expedited. But unfortunately our, you know I would say gamut of products or services didn’t kind of evolve. But after this conflict do you see some more, you know, chance of at least ads happening? You mentioned in your prepared remarks but. Just wanted to get little bit more clarity on it. There is a budget of 40,000 crores emergency procurement being talked about. So just wanted to get little bit more color on on that aspect.
Ashok Atluri
Yeah Amit, I think the orders, you know again the government was to be fair to the government they were actually consolidating the requirements of the antidotone systems to you know, really understand what how much is the requirement when to procure etc. So the other, other bulky orders were placed on other equipment. But even though you know as the as a industry we do feel that you know they probably have placed but the fact was they were trying to assemble. But you know this is a fortunate for us. The you know the operation Sindur has been I would say a stroke of luck in the.
In the sense for the past for the dastardly act that water committed. That was a really, really bad act. But post that what happened was a stroke of luck for us in the sense we were able to actually go Destroy you know 10x of the what they did to damage they did to us. You know and then we were able to test our equipment and government was able to see what happens in the real world. And of course it was also almost like a you know, PR and a marketing spend for the Indian equipment. We were proved beyond doubt that our equipment works.
So I think post the horrible horrific incident what has happened is actually very good in my estimate. And now we see that there is a sense of urgency, absolute sense of urgency to acquire these new age war equipment, the drones and the anti drone stuff. Yes, I say to your question, the short answer is yes. We think that the government has really really appreciated the role of the drones and anti drone systems and they’re accelerating the procurement and we think companies like Zen will benefit from this. A new sense of urgency that the government has.
operator
Thank you sir. We have our next question coming in from the line of Mr. Krishna P. Mr. Krishna, please go ahead with your question.
Unidentified Participant
Is audible sir.
operator
Yes, we can hear you sir.
Unidentified Participant
Good afternoon. My first Question is regarding that DRDO Antidrone. We are part of the DRDO system. How we are part of that sir Anti drone system, what they are supplying to them.
Ashok Atluri
So you know, the ZEN doesn’t supply anything to drdo. Our, our subsidiary which you know, which has developed the Antidon system. They also collaborated with DRDO and they supply the jammer and the detector. I think maybe little part of that. But you know these are the two major elements that UTS has collaborated with DRDO to supply to them.
Unidentified Participant
Okay sir, my second question is regarding the chip. Are we designing the chip sir, for the what we are using in our systems?
Ashok Atluri
No, Krishna, we are not designing the chip ourselves. We are making use of ready made chips. So again, you know, our dependency is not on a particular chipset. What has happened during COVID was Covid and Ukraine war. Lot of there was shortage of chips. So we had to design multiple times that the same chipset, the same PCB with different chipsets. So we are chip independent. We are not dedicated, you know, tied to any chip. But. And of course, but the chips are not made by us. They are procured from, you know, for foreign sources. And we are built, you know it’s like think of the product like a Windows operating system or the intel chip.
We buy it from outside. We build the applications around that. So that’s what the chips are still procured from abroad. We are hoping that with the new policy that the government has done for semiconductors, some of these chips will be made in India eventually. But as of now most of the chips are procured from abroad. But again from non Chinese sources.
Unidentified Participant
Okay sir. Thank you sir. Sir, is B Robotics is they have any patent? Sir, you have not mentioned anything about the patent. Patent of.
Ashok Atluri
They have applied for some patents and I think the patents have yet to be granted. They. They have been applied, I think. Yeah.
Unidentified Participant
Okay sir, one more, one more last question. Is there sir, in anti drone now we are saying with the lesser technology the drones are field drop. Are we working on that?
Ashok Atluri
No. Laser technology we are not integrated. I know. I think the laser technology was found wanting in the current operation. But we have integrated the L70 weapon and we have launched this remote control weapon stations through AI Turing. And those weapon stations can be integrated with anti drone systems. And also those remote control weapon stations can be used independently of the ads. So this is the market that that’s growing, showing a lot of interest in our products. And so we look forward to those accretive sales also as we go ahead.
Unidentified Participant
Okay sir. Thank you sir. That’s it.
operator
Thank you. We request participants to restrict to two questions and then return to the queue for more questions. To rejoin the queue, you may click raise hand icon again. We will have our next question coming in from ca Garved Koil from Invest Analytics Advisory llp.
Unidentified Participant
Hi, am I audible?
operator
Yes, we can hear you
Unidentified Participant
sir. Congrats for a good set of numbers. My first question is on your guidance. Like you mentioned, FY26 is expected to be muted 1. Although medium to longer, longer term guidance is very much aggressive. So can you put some color on why we are looking for a muted FY26 despite the current environment that you mentioned, the government is increasing the procurement emergency procurement, particularly after the incident happened with our neighbor country. So that is my first question.
Ashok Atluri
So the Goyal, the thing is that the, while the orders, so I, I think we, we think the order position, the order book position will improve significantly and that may happen, you know, by, you know, by the H1 end of H1. And so you know, by that time if we get the orders how much of it can be executed during the current year is a question. So you know, that we’ll come to know as we go ahead in the, in the couple of months, I think we’ll be in a better position. But we are saying that, you know, by, by the end of H1 we should definitely have a very clear picture, possibly a clear picture. And as soon as we get, we’ll share this year’s thing. And the, the reason is even if the orders come, a lot of orders come, the execution will be, will spill into the next financial year. And the, so that is the reason we are saying that we are not, we are not able this year will be muted.
Unidentified Participant
When we say this year will be muted is it will be like can you put any number to it, like 10 kind of growth or anything like that.
Ashok Atluri
I’m not putting any number to it, Goyal. I’ll, we’ll, you know, unfortunately I, that thing looks tentative at this point in time and you know, I’m a very aggressive number giver. You know, if I have even a slightest inkling I go ahead and give the number. But at this point in time I’m, you know, restraining myself from doing that.
Unidentified Participant
And 50% CAGR is in debt for next three years, right?
Ashok Atluri
Yeah. Cumulatively we think yes, you know, we, it comes to about 6,000 crores plus of turnover in the, in the FY26 to 28. FY28. And we think that that’s achievable.
Unidentified Participant
So that means forever 28. You are looking for a 6,000 cr kind of turnover, right?
Ashok Atluri
Oh no, it’s a cumulative turnover.
Unidentified Participant
Cumulative turnover.
Ashok Atluri
Our prediction was the base is 900 crores. So FY26 would have been, you know, 1350, which we think will not happen. Our FY27 would have been in 2000 and FI28 would have been 3000 crores. So when you add up it’s a bit more than 6,000 crores. So that.
Unidentified Participant
Got your point, got your point. And just last one thing on the margin side, sir. Are we able to maintain the kind of margins that we are doing currently?
Ashok Atluri
So you know, we have given a guidance of margins of you know, 25 and 35%, 25 PAT and 35 EBITA. And even if you see, you know, this time, even though it looks little more our operational income, if we take out the interest income that we have got from the QIQIP raise, the net comes to around that region. Only 25 for PAT and 35 for the EBITDA margins.
Unidentified Participant
And you will maintain that, right?
Ashok Atluri
Yeah, we feel very confident about those margins. Yeah, understood sir.
Unidentified Participant
Thank you very much sir for your time. All the best for the future.
Ashok Atluri
Thank you.
operator
Thank you. Our next question is coming in from Mr. Akshay Patel from AK Investment.
Unidentified Participant
Hello. Congratulations sir on the great setup number. Sir, my first question is that recently BL gets order of 572 crores for counter drone system. So are we also expecting some order floor to also come in this quarter as now the government has expedited the program procurement for the defense equipments and all these things?
Ashok Atluri
Yes, we are expecting orders to come during this quarter and next quarter at least in the H1. We are expecting some orders to come through for anti drone systems.
Unidentified Participant
Yes, okay sir. And sir, just in the context of the industry, so how many players currently are in India that is developing the anti drone system and what might be our market share in the anti drone solutions in India? And also can you put some light on the global anti drone defense solution?
Ashok Atluri
You know I, you know I think the, the indigenously developed IDDM category in India, you know I’m, I am not aware of any other company than Zen where all the products like Detector, Jammer, Radar, eo, any hard kill integration has been done. So we are the only company in the private sector for sure and we expect that this again you know, to the question in 2023 we, we have participated in a tender a year and a half back and that was open tender with the specific specs which were absolutely suitable for, you know, actual operations.
And you know there is no other, no public sector or private sector company even qualified in the trials. We were the only company that qualified. So you know to, so the, to your question, the answer is that you know, Zen is way ahead in terms of technology in these products. And if they want, you know, war tested technology, Zen is the way to go. But again you to your question, who are the other players? DRDO has transferred technology to, you know, from five, six companies. So they are the other players with the DRDO technology. But again no, no one has done the self funding like we have done and no one has the technology that we have. And nobody has been tested the way we have been tested in actual situations.
Unidentified Participant
All right sir. And can you please put some light on our US business expansion and what is the traction over there? We were expecting the significant orders to come in FY27. So are these things intact?
Ashok Atluri
Yeah, so yeah. So the work with the US is going on. You know, I think he’s getting a lot of business for us and our move to US was well planned. We have now two, you know, at least to four people working there for us. Very senior resources who are, you know, who are designed, meet, going and meeting customers, attending exhibitions. And we think, we think we will be getting some business. FY27 should be the year from in which we should get the orders. Yeah, we are still. That’s in. The plan is intact.
Unidentified Participant
Okay, sir. All right. And order book, consolidated order book. It consists of all three recently acquired companies like Ari Pyro Robotics and Vector Technics. Or is it our standalone order book?
Ashok Atluri
The 692 crores is our standalone thing. They have additionally I think at least 100 plus crores. So you know that would be another 100 core consolidated would be way bigger than that. Yeah, but yeah. What? The 692 crores is standalone only.
Unidentified Participant
Okay, sir, thank you so much and best wishes for the next year.
Ashok Atluri
Thanks Akshay.
operator
Thank you. Our next question is coming in from the line of Mr. Rajamohan Vaikuntha Raman who is a professional investor. Please go ahead.
Unidentified Participant
Yeah. Thank you for the opportunity and congratulations on a great set of numbers. Basically in the anti drone, especially in the light of operation Sindur, you had also indicated two use of our equipment in an interview. Could you quantify the value of antidrone of Zen that got used was our hard kill used. There were mentions of D4 anti drones. I was just trying to understand how did Zen fit in in terms of Value as well as in terms of quality.
Ashok Atluri
Obviously Rajamon, these are the questions that we will not be able to answer the specific you so again again my feedback is based on the ground feedback that received from the forces and where was it used, how much was it used is something that you know I would not, I don’t know and even if I knew I would not be able to share that because of the restrictions that we have. But you know broadly our systems were used and we have got lot of thankful notes from the people who are there and they were significant interceptions. We know that if they were not there probably it would have been a bad situation. But yes for the significant intervention were done by our ads.
Unidentified Participant
That’s really great. Congratulations on that. Next on the acquisition, especially on AR IPL and the synergies that Zen would provide from your internal assessment, does it feel combining weapon with commercial simulator could create a scale multiplier different to the growth trajectory of Ariplane like Zen from what it was three, four years back, about 150 odd crore company to 900 crores now. Could a similar thing play out here in ARIPL
Ashok Atluri
that Rajman, it’s a very insightful question. I think you’re really doing you know good homework on this. So you know this is exactly the plan that you know that what we did for the army we want to do in the field of naval simulation also. And there is a lot of demand for the naval simulation. And you know this car, the Ari has all the products that are required minus the weapon simulator which Zen has which are used in naval products and Navy is certainly acquiring very, very big role.
You know again I, I told maybe I shared earlier but you know we just focused with the land borders that we have. But when you turn around the map of India, the huge ocean that is there where everyone from America, us, Russia, everyone is interested in that part of the ocean and it has lot of sense to a lot of trade that’s happening. So yes, I think this is a very good acquisition that we have and I really want to thank Shravan who built that company so that we really, really think that this was a great acquisition and and it was good for.
It is going to be very good for the country and also for the friendly navies around the world. Yes, I think this is a very big story. If we get the, if you crack the code this could really run into multiple of course 900 crores includes the anti drone systems also. So this 4,5 crore, 100 crores kind of turnover is something that can be achieved with, you know, with Ari, I definitely feel maybe much more than that.
Unidentified Participant
That’s great. One final question. Similarly for say vector techniques, basically what is the kind of market opportunity they indicated to 23 product lines in the last quarter? Call generally wanted to understand in terms of scale of opportunity that this company provides.
Ashok Atluri
So you know, as we speak, you know, post the recent event, these guys have won. They’re going really big and they’re getting lot of, lots of calls for the components that they are developing and they’re also getting pressure to develop new R D. So one is this the developed products. They’re setting up the manufacturing facility so they can deliver on scale. Second is developing new products which they have prototyped to be into commercially available products. So you know Rajmon, I think it should be tens of crores in the immediate future but eventually it’s running into at least a 300, 400 crores kind of thing.
Unidentified Participant
Thank you very much sir for your insightful answers. And though I understand there are a lot of pressure in terms of objectively determining and expressing you are trying to be as best as possible trying to give us answers. Thank you very much and best wishes on the bagging quicker orders.
Ashok Atluri
Thank you Rajman, I appreciate your wishes.
operator
Thank you. We will have our next question coming in from the line of Mr. Mehul Panjawani from 40 cents. Please go ahead sir.
Unidentified Participant
Thank you so much for the opportunity. Am I audible sir?
operator
Yes, we can hear you.
Unidentified Participant
Okay. And first of all I would like to congratulate the entire Zen team because you know we are talking about that we are playing a very significant role in the nation’s defense system. So that’s amazing to be associated with such a great company. Sir, I have a question on UTs which is you mentioned that you know primarily the antidrone system developed by provided to the drdo. So when did we acquire UTS and how much is it contributing to the turnover of Zen?
Ashok Atluri
So you know we, we. The acquisition was you know between 28, 2018 and 2019. We acquired the company and, and we started developing these anti drone systems. And in terms of the turnover, I think the exact turnover. I’ll just, I’ll ask Abzel to share. But yes, UPS has single handedly developed the complete anti driven of the all the components of the thing. Of course the electronic optics which is now becoming very important have been developed by AI Turing. But other part including the radar. You know radar is a decade long project but I pulled it off very very fast.
Of course we started the effort and we Kind of lagged between. But you know, it was a really short term that Raju and Nagendra were able to pull it off and. Yeah. So again Abdul, just share the figures on.
Afzal Malkani
Yeah, sure. So out of the total revenue it’s around 125 to 130 crores. This is the. Around the contribution. Yeah. Total for the year.
Unidentified Participant
Okay. Sir, my next question is on. I’m new to the. I’m newly tracking this company. So I would like to understand. I would like you to please list down all the subsidies which we have and how much is our holding? Is it like we are. We are 100 holding each of the subsidiary or how much.
Ashok Atluri
In each of the. How much we hold in each of the companies. Right. And the list. Companies.
Unidentified Participant
Yeah, list of the companies. And what are they specializing in? Sorry.
Ashok Atluri
Yes. Okay. Thank God. So you didn’t ask. Okay. So you know that I think I’ll. I’ll tell you, you know, UTS is there of course. And then we have ari, which is into naval simulation. Then we are air Turing, that is into remote controlled weapon station. And then we have Bhairava, that is into, into, you know, robotics. And then we have vector that into the drone ecosystem. So these are the major ones that we. Of course we have subsidiaries in US and the com. These companies also have their own subsidiaries. But these are the major segments that we play in.
Unidentified Participant
Right. And. And do we hold 100 of these subsidies or no?
Ashok Atluri
No, some, some are 51. Some are even. In fact Bhairava is 45 or so. It’s different. AR is 100%.
Unidentified Participant
Right. Sir. So last question from my side. So where, where do we see that, you know, some of the defense areas where we don’t have products, where are the gaps which we have still? I mean I know defense is a very wild area, but pardon my ignorance. Yeah.
Ashok Atluri
So you know, we, we, we. I mean there are a lot of things, you know, artillery, tanks. We don’t do a lot of things. But what we have taken a call is, you know, what is the Pareto focus? Initially we were just focusing on training because training was the most. But now we are trying to focus on two areas. One is the, you know, the drone ecosystem, anti drone systems and drone. We think these will absolutely determine who’s going to win a war. So we really focused on that. The second, the, you know, this robotics part of automated weapon system and robotic robots themselves. So these are two things we think are really, really Pareto in determining who is going to win a war. And so we are Focused on that and the rest of the thing, we don’t have any plans as such and so we’ll be just focusing on them.
Unidentified Participant
Right sir, thank you so much. And once again I’m really feels great to be associated with this organization. Thank you.
Ashok Atluri
Thank you.
operator
Thank you. We will have our next question coming in from Rudresh Kalyani. Kalyani, Private business. Please go ahead.
Unidentified Participant
Hello sir, am I audible?
operator
Yes, we can hear you.
Unidentified Participant
Yeah. Recently Indian government project from the Armenia. So have we got anything from that bucket or.
Ashok Atluri
You are saying did Zen get any orders from Armenia? So you know we again Rudraj, unfortunately we cannot name the countries from which we have got the orders but we have done almost 300 crores worth of order execution this year of exports. And typically our countries that we deal with are in Africa, CIS and Middle East. So you know, so this is the broader classification that we have. But the countries when they sign the contract they make us, you know, they, they tell us that we cannot share the details of what we have purchased, how much we have purchased and we honor because they kind of gives away their, some kind of their preparation levels. So the, that’s, that’s the point. Yeah.
Unidentified Participant
Think on the this with our products being tested in operations in the world. So get any inputs and the Indian army products so that we when we relaunch in the next version we can make use of it and come up with a better product.
Ashok Atluri
Yes, Rudraj, absolutely. You know, as we speak the inputs are helping improve the products that we have. You know and typically what we do is not only for the new products but existing products also. We try to give the technology away free so that the government is better prepared and they don’t have to buy new equipment. So yes, the inputs are being, are being have some have been gathered. They’re still being gathered. And as, and when we get the things they will be incorporated into the new systems and you know to make them absolutely state of the art.
Unidentified Participant
Okay. And see I think this is the first time we use product in the domestic market. So what are the lessons for us from, from this versus the lessons which we got got from the when we used it Armenian region?
Ashok Atluri
I don’t know you’re so sure your intelligence says that we are in Armenia. I can’t help that. But anyway, so the, you know the thing is that there is no, I, I won’t say that what was that gap there? But you know, here what we got is really, really good inputs and we, you know, again I think that this is not the end of the war. And this is just a pause. And this is the pause where we should really really regroup. Put in our best efforts to upgrade our systems and next time it’s not going to be a simple war.
I think it not be with one one neighbor. But it will be a multi front war. And we should be prepared to handle multiple enemies at the same time. So you know that means to say that we really need to ramp up from domestic technology only. We cannot import this technology. If we import the, you know, we are on our own. We have seen this time, everybody was there. You know, no one came to our aid. Everybody is busy with their own life or they will not help you. So this has to be indigenously developed.
And you know the Zen is moving earth and heaven to see that these technologies are developed. Our teams are really you know sweating out the days and night to ensure that we have the absolute number one technology in the world. I think we are on track with for that.
Unidentified Participant
Okay, and my final question is if you see then five year, five year or ten years down the line how will be our revenue breakup like between the simulation like that?
Ashok Atluri
You know I think anti drone when you start adding the hard kill and the EO and all the other options we think that anti drone will become a significant segment. And of course we have drones also. Now we’ll be getting into drones also. So that will I think probably be around 70% of the business. Drones, anti drones and hard kill options will be about 70% and five years time, maybe 30% percent will be simulate training and simulation.
Unidentified Participant
Okay, thank you. All the best.
operator
Thank you. Our next question is from Gyan Prakash Yadav who is an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Good afternoon. Am I audible?
operator
Yes, we can hear you.
Unidentified Participant
Hi sir. Congratulations for the good set of number. Just wanted to know what’s the present cash balance we have on hand and. What’S the plan for the utilization of same. Secondly then I would like to verify what was the revenue from the ari. That’s also.
Ashok Atluri
I’ll pass it on to Afzal to answer this question. Floor is yours.
Afzal Malkani
Yeah sure. So total cash balance is around 1037 crores. Out of which 410 crore rupees is from the proceeds of the QIP and 625 crore rupees for the Zen’s internal accruals. So total cash balance is 1037 crores. Most of the cash balance we are going to utilize for this organic and inorganic growth both and financial year 2024, 25 ARIPL revenue was around 137 crores.
Unidentified Participant
So sir, the A ARI got included. To us I think only in February. So whole 137 is for them for. The whole year, right sir?
Unidentified Participant
Yes, for the whole year. Yes.
Unidentified Participant
Okay. And sir, any acquisition planned in future because we have lots of cash in hand.
Unidentified Participant
We have been working on that.
Unidentified Participant
Okay, thank you. That’s all.
Unidentified Participant
Thank you sir.
Afzal Malkani
Yeah, thank you. Thank you.
operator
Our next question is coming in from the line of Raj Rishi from DCPL. Please go ahead.
Unidentified Participant
Hi sir, can you hear me?
operator
Mr. Rishi, can you speak a bit louder?
Unidentified Participant
Can you hear me sir? Hello?
operator
Can you please try again?
Unidentified Participant
Yeah, can you hear me now?
operator
Yes, we can hear you.
Unidentified Participant
Yeah. This constant news flow of defense spending being increased or being forced to increase like after this Trump administration has come. In the talk of EU upping the you know, percentage of GDP to almost 5% or that’s what Mr. Trump is asking them to do. So significant. Some, some people say it’s like sort of a defense super cycle world over. So how do you stand to benefit. From say your say Europe upping the. Defense spend the way it’s being talked about?
Ashok Atluri
You know I think the, the impression was that you know, wars have ended and there’ll be no significant war. So that has been complete. That belief has been completely appended by Ukraine and Russia and prior to that Armenia and Azerbaijan. And so this, you know the thing is a strong neighbor is a good neighbor kind of thing. You know you. It’s better to have stronger neighbors. So, so this spend of GDP of 5% is a welcome change because especially you know if it is defensive and not offensive use and how is then going to benefit out of this is one is that we are setting up our office in US and I think that the decision was little patient and we are going to benefit a lot from that.
And you know asking EU to spend and EU themselves said that we are going to spend $800 billion and it will be mostly internal. So the good news was, you know we were talking to somebody NATO consultant and what they told us was that you know, this is a very good opportunity for Indian industry, not only for Zen because there will be a, you know a free trade agreement that may be signed with them. So we are trying to prepare for that free trade opportunity with the eu. So I think this is a very, very big opportunity especially if your products are world class and you know, you like we feel our simulators, naval simulators and simulator and antidote systems are world class and you know as we speak even our drone ecosystem for the drone ecosystem vector is being approached by you know, European and American companies. So I think we are, we are there to take advantage of this.
Unidentified Participant
So one more question like what’s your. Vision about Indian defense spend? Like right now it’s around 1.9%. Do you expect like this? What would be your perception over the. Next year or so?
Ashok Atluri
Raj? Very frankly, you know there is X and a function of X. You know a function of X is, you know how much am I getting out of the total spend. So you know I would be really focused on that they should spend smart. I don’t think they should just, just increase for the sake of increasing. Can they, can they leverage? Can they? You know, you know, you know I. Somebody was saying you know they should buy F35. You know F35 is the worst kind of aircraft. Elon Musk has gone on record and saying it broken at requirements.
It is jack of all worst value for money in the military history. But still some people are talking about it. So if they spend smart I think they really don’t have to increase the thing. Spending smart would be the key to thing. So I don’t have any wish list that from 1.9 they should spend 5% or 3%. I don’t have any wish list like that at all. Only thing is they should spend strategically on a paro technologies. And I think and we are in that field, if they act in our focused and paro way we will benefit from that.
Unidentified Participant
Thank you sir.
Ashok Atluri
Thank you Raj.
operator
Thank you. We request participants to restrict their questions to one. We have our next question coming in from Vinayananda who is a private investor. Please go ahead. Mr. Anand, please go ahead and ask your question. It seems there is a connection issue with Vinay Anand. We will go forward with our next question from Aryan Oswal from Fintrest Capital. Mr. Aryan, please go ahead.
Aryan Oswal
Hello. Yes. Am I audible?
operator
Yes, we can hear you.
Aryan Oswal
Yes. Congratulations on a good set of numbers. Sir, my question is on the line of cash conversion cycle we have seen a significant decline in the last couple of years. So are we expecting further decline or where do we expect the cash conversion to be for the next year?
Ashok Atluri
I’ll let answer that.
Afzal Malkani
So last quarter our cash conversion cycle was around 237 days. And by on 31st March 2025 our cash conversion cycle was reduced to 160 days. If we give the further breakup then receivable was 148 days. 20 days for the inventory, 9 days for the advanced supplier the total of these three comes 177 days. And if we deduct 5 days for these payables and 12 days for the advance from customers then net working capital cycle is 160 days. And going forward we are expecting in the range of around 135 to 140 days. 135 to 40 days, is that yes for, for next year.
Aryan Oswal
Okay, answer one more questions. How much are we looking to spend on R D for the next next year and for the. And for the next FY26 and 27.
Ashok Atluri
So I love. So you know, so there is a you know 70 crore expenditure that we are doing for setting up the R D facility and uh, you know another 5 crores for the equipment. Etc. But again uh Aryan the thing here is that we are very opportunistic. We get. So these are you know, even though people give you know five year plan budgets and all that. We do give the budgets but you know when as and when the opportunity arises, as and when some new gap is seen in our product, we go after that.
So you know, so at present we are doing already R D expenditure of around 35 crores. So we expect this to go to 50 to 60 crores on a consistent basis. But there may be a large investment when required to ensure that we are able to supply the required technology that is asked by the armed forces.
Aryan Oswal
Okay, thank you so much. That’s all.
Ashok Atluri
Thank you Aryan.
operator
Thank you. Next question is coming in from Deepen Vakil from Philip Capital. Please go ahead.
Deepen Vakil
Thank you so much for the opportunity and congratulations on a great performance and also on in your role in operations indoor. So my first question is on the line off. So your fourth quarter performance was largely driven by the export segment which has even more or less dried your export order book now. So any outlook in terms of export orders that you’re expecting in near term. And so how. How do you see your export business panning out in FY16? How. How is the visibility on export business?
Ashok Atluri
So export business. You know the, our discussions are ongoing and you know I think there’s a large now post the recent crisis. We, we think that the, the, the conversations have changed and they want the equipment that we were initially offering but they said we don’t want that. They were trying to buy you know the commercial drone neutralizing version is only a toy actually. You know and Most of the 90% of the companies make that anti drone system which can only come neutralizes 2.4 and 5.8 GHz DJI drones. But now with this thing people have come to know that this, this is a band independent field and people will come after us.
So that has changed the conversation in the export market for us. And the expo export guys have been now asking about this, these information. So you know once we are able to fulfill the you know, extraordinary need for the Indian armed forces then you know post that we’ll definitely be focusing on exports also. But the conversations have started and there is a huge demand for anti drone systems in the abroad and of course the training simulator demand is still going on. We are talking about the army simulators and naval simulators. There’s a lot of demand for naval simulator, a lot of conversation.
Ari themselves have a very large export setup. You know for 100 crore company they have a really very, very robust export setup. Even though it’s more commercial focused. We are you know, you know leveraging them to get into the navy or navy also in various foreign countries. So I think the exports will start getting the order. We don’t have orders in hand but you know we’ll, we should be getting start getting the orders sometime maybe a couple of quarters from now.
Deepen Vakil
Got it. So apologies for the repeat question but possible for you to reiterate your order inflow guidance.
Ashok Atluri
Yeah, so you know we think by H1 end of H1 we should be having about 800 crore. Out of that 150 crores we already received. Another 650 crores we will be receiving by H1 and that’s our expectation. This is what I have said earlier also and still we feel that holds. Good
Deepen Vakil
and that is largely coming in from the simulator side.
Ashok Atluri
Yeah, it’s all simulators as of now.
Deepen Vakil
Yeah, got it. So, so thank you so much for answering my question and all the best for the FY26.
Ashok Atluri
Thank you Deepen, appreciate it.
operator
Thank you Ladies and gentlemen, due to positive time we will take questions from two more last participants. Our next question is coming in from Ajay Surya from Nashai. Please go ahead.
Unidentified Participant
Thank you for the opportunity sir, looking at the recent war the necessity along with the opportunity size for anti drone is quite big and important. But sir if you can break the opportunity size and share more details because even under the anti drone there are several type of components and based on the requirement of Indian army maybe like the radar sensor jamming, hard kill command control etc. Like so I wanted to understand like if you can break the opportunity size and does the Indian army give order as a single segment order or a multiple segment order like Maybe they require just a jamming anti drone so they’ll give an order to a player like someone like us or do they want jamming plus hard kill? So is it a multiple segment order? So if you can also share details on how does the order cycle or order procurement happens.
Ashok Atluri
There are different kind of necessities that they have. You know, for example, they may have a very, very small portable requirement where they say listen, I just want to neutralized commercial range of drones. So that’s a different thing. So but, but a comprehensive solution is good that you brought up Command and control center also that’s the software that binds all the hardware together and it’s the soul and heart of the thing. So you know, I’ve not been speaking about it, but that’s the very, very major thing that we also we have developed and we use that.
So so when they need a comprehensive solution with the radar detector, jammer, electronic optics and a hard kill with the robust command and control center and ability to handle non commercial band independent drones, then is the vendor to go to. So we don’t think anybody else is doing that at this point in time. And that was again 23, there was a tender and we didn’t have anyone qualifying there. So I think Zen is positioned for these hike and kind of simulators. To your question, if somebody just wants to buy a radar or a jammer or a detector, typically they would be very useless in case of, in case of an attack, especially from the armed forces point of view.
So you know, and you know, given the fact that you know, even though earlier most of the drones were even now in this there are a lot of drones that were coming through, you know, with the ground control kind of situation. But in future we expect them to be autonomous. So for handling the autonomous, it’s a different game altogether because the videos are also very advanced to handle autonomous will probably be doing, you know, hard kill kind of situation. They no longer the soft kill will work so that the evolution is happening as we speak.
But you know I, I think as on today Zen is the go to company for giving this full fledged solutions to the Indian armed forces.
Unidentified Participant
So sir, based on this the bigger opportunity lies in maybe the hard kill and command control is my understanding. Right. And this is the area which Zen is dominant and want to focus going ahead.
Ashok Atluri
No, no, Command and control center is a software which binds together so it has to go along with the system. Some people say that our command and control is independent. Maybe it is but you know we have our, you know, think of Apple vs PC. PC World, you can keep buying everything and assemble but Apple gives a complete full fledged solution. Think of as Apple, you know, Mac kind of a solution. And yes we think the whole has a lot of market. What was your second question? We don’t sell CNC separately. We sell it only as a package.
Unidentified Participant
Okay so just like breaking the opportunity, the bigger, larger opportunity even in the anti drone segment wise if you can break that up like maybe like it’s a 5,10,000 crore market. So maybe the hard kill would be a thousand crore kind of market or
Ashok Atluri
so. We, we. I, I think you, you are right Ajay. You are a sense that you know the thing is moving towards hard kill is absolutely right. So we’ll have to. That thing is right. But you know we, we got the estimate for this project to be around 10000 crores. You know this was about two or two and a half years back. But that figure is no longer valid. It’s much, much larger than that at this point in time. And we, it’s a, it’s a multiple of that not just a little percentage. So we think that market size has increased tremendously as we speak and we think that we should be getting some reasonable chunk out of that.
Unidentified Participant
Okay sir, all the best for future.
Ashok Atluri
Thanks Ajay.
operator
Thank you. We will take our last question from Manan Vandoor from Walford pms. Please go ahead.
Unidentified Participant
Hello.
operator
Yes we can hear you.
Unidentified Participant
Yes, yes. Okay. Okay. Hello sir, it’s been a pleasure speaking with you for so many quarters. So sir, in Q1 okay we you spoke about. You all had a SIM expo, okay which happened in Orlando and you said that you had a stall over there and you got inquiries for containerized tank simulators in that expo. And you said that that Orlando, in Orlando, the next five year budget of Orlando they are having huge demand for that. And you said that we are already making it for the Indian army for the decade and you said that we will, you know we might, we might start exporting etc. Etc. So it’s, it’s been a year. Any, any update on that sir?
Ashok Atluri
So you know this was last November. We. Last November, December with this. The expo is called itsec. It’s a simulation exhibition. So in that they were, they came to approach us for you know with the R D proposal for doing R D for out of the, for the next five years. They were having R D budget. They said can you make containerized tank simulator with our funding. So we said we already have it and we showed connected to India and Showed it live to them. And so yes, the, you know, the fact that we have is known to them now.
So they are, the budgets are being formed and we have informed them that these are the things. So we, you know, now we are waiting for them to actually float a tender. The tenders may be floated next year, not earlier than that. Typically that’s a one, one and a half year cycle before, before the float the tender.
Unidentified Participant
Okay, okay, understood. And so the next question, the last question is on that we had numerous new products like hawkeye, barbaric, prashta, stairstaff640. For all of those we have all those new products we have started supplying.
Ashok Atluri
No, no. So we have started some of them. We have started exhibit, you know, conducting trials and we think that during the years some orders will start trickling in, but they will become much, much larger next year. But this year we should definitely be getting some orders in this, in the segment that you spoke of RCWs and surveillance stations.
Unidentified Participant
Okay. Because, because for those product itself, you had said that this new product itself will become new revenue streams and thousands of crores. Hence just eventually they will, if we.
Ashok Atluri
Are able to inte anti drone system, they will be the hard kill part of the thing and they can become very, very big for us. There’s no doubt about that.
Unidentified Participant
Okay, understood. Thank you so much, sir. All the best.
operator
Thank you ladies and gentlemen. That was the last question for today. I will now hand it over back to Ashok. Sir. Over to you, sir.
Ashok Atluri
So thank you fellow investors and other participants who are here. You know, it’s always pleasure interacting and the questions that are asked usually are high quality and I’m, I’m pleased that the tradition continues. Again we are open. The investorsentechnologies.com is a, you know, address, email address that you can, if any of you have not been answered the question, you can send your questions there and we, you know, we look forward to your continued association with the company. Thank you so much.
operator
Thank you on behalf of Zen Technologies limited. That concludes today’s conference call. Thank you for joining us and you may click the leave icon to exit the meeting. Thank you for your participation.