Good evening and warm welcome to all. Thank you for joining us on our Q1 FY 2027 earnings call.

I'll take you through our financial performance for the quarter ended 30th June 2026. Consolidated revenue from operations for Q1 FY 2027 stood at Rs 141.6 crores, compared with Rs 178.1 crores in Q4 FY 2026 and Rs 158.2 crores in Q1 FY 2026, FY 2025, FY 2026.

As communicated in our Q4 FY 2026 post earnings investors meeting, a significant portion of the current order book was secured from the second half of FY 2026, and given a typical execution cycle of around 12 months, revenue for the year is expected to be weighted towards Q2 and Q3. Q1 has come in as we expected, and we remain on track with our delivery schedules.

Operational EBITDA for the quarter stood at Rs 38.7 crores, at an operational EBITDA margin of 27.3%, compared with 28.6% in Q4 FY 2026 and 40.9% in Q1 FY 2026. Profit after tax for the quarter stood at Rs 34.5 crores, at a PAT margin of 24.3%, compared with Rs 31.5 crores in Q4 FY 2026 and Rs 47.8 crores in Q1 FY 2026.

I would note that this quarter's consolidated PAT includes a one-off exceptional loss of Rs 3.4 crores relating to a fire incident at one of our subsidiaries in which certain inventory, which is adequately insured, was damaged. Adjusted for this exceptional item, on a post-tax basis, profit after tax for the quarter would have been approximately Rs 37 crores at a margin of approximately 26.1%.

I would like to spend a moment on the margin movement this quarter. The margin for this quarter is lower than the guidance of 35% at the EBITDA level largely due to negative operating leverage.

A significant portion of our cost base, both at the standalone level and across the group, is fixed in nature. On a lower revenue base, this fixed cost absorption compresses the margins.

As revenue picks up through the year, in line with our order book execution, the same operating leverage works in our favor. Importantly, our gross margin for the quarter stood at 72.9%, broadly consistent both sequentially and year-on-year.

This indicates that the profitability of our business has not changed structurally. The compression at the EBITDA level is largely a function of the operating leverage, our fixed cost base being spread over a lower revenue quarter, and not a reflection of any change in the underlying economics of our products.

On the year-on-year comparison specifically, I would add an important point of context. Q1 FY 2026 benefited from the reversal of certain provisions created in FY 2025 amounting to Rs 7.65 crores that were no longer required.

These provision releases had given Q1 FY 2026 an additional margin uplift of approximately 5%. In addition, this quarter has seen an increase in warranty provisions of Rs 2.88 crores and incremental R&D costs of Rs 4.25 crores.

On a sequential basis, our margin of 27.3% is broadly in line with the 28.6% in Q4 FY 2026, reflecting a stable underlying run rate. Taking these points together, I want to affirm that the margin this quarter is a function of revenue timing and operating leverage, not of any structural change in the profitability of the business.

As revenue scales through the year, we expect margins to recover and to end FY 2027 with a full-year operational EBITDA margin in the mid-30s, in line with our guidance. Now coming to the order book.

The consolidated order book stood at Rs 1,239 crores as at 30th June 2026, comprising an equipment order book of Rs 920.6 crores and an AMC order book of Rs 318.4 crores. I want to address the movement in the order book directly.

During the quarter, we executed Rs 141.6 crores of orders and secured Rs 44.6 crores of new orders, resulting in a net reduction over the March position. Subsequent to the quarter end, we received a further order of Rs 177.5 crores from the Ministry of Defence for the upgradation and integration of the tank and crew gunnery simulators.

Our pipeline of opportunities across counter and training systems remains strong. On working capital, our consolidated working capital cycle stood at 257 days as at 30th June 2026.

The increase over the year-end position is primarily driven by a build-up in advance to suppliers and inventory, both of which reflect the procurement and production activity currently underway to execute the order book for delivery through FY 2027. Debtor days remains stable at 122 days.

On the balance sheet, the liquidity position of the group remains strong, with cash and bank balances of approximately Rs 1,217 crores as at 30th June 2026, and the group remains debt-free. This is the brief on our financial performance for the quarter.

We can now take questions. Thank you.

Good evening, sir. The first question is on the margins only.

YoY there are deep in the margins. Even the revenue, if you see that there is a scale up in revenue, then operation leverage will kick in.

As the revenue is almost similar YoY, what would be the reason for this margin shrinkage?

Thank you, Bala. Bala, like I mentioned in my opening comments, in Q1 of FY 2026, there were a couple of provision releases which happened.

If you see the comparison between the selling and other admin expenses, which is a big difference, that's primarily because FY 2025 was a year wherein we executed a lot of orders and we had to create provisions in the balance sheet, and most of the provisions after the balance sheet we released it because they were no longer required. That has given a picture wherein the EBITDA margin was around 40% for Q1 FY 2026.

Adjusted for whatever provisions have been released, the actual margin for Q1 FY 2026 would be around 35%.

Understood. On the order book front, so as of now, even if you include this July order, it's around 1,400 crores.

By the end of FY 2027, what is your expectation for the order book?

Like we've communicated earlier in our investor meetings as well, our expectation is that we'll end the year around 2,500 crores of order book, that is after the execution for the current year. The pipeline of orders that we are currently evaluating is very healthy, and once the government procurement starts, we should see a healthy amount of this pipeline converted into the order book by end of the year.

On projections front for the next two years, and we have a target of hitting cumulative 4,000 crores of revenue in the FY 2027 and '28 together. With this current geopolitical situations, and there should be some rush in the anti-drone systems those things, do you see any project probability to get some bigger figures in FY 2027 and FY 2028?

I think we should be getting quite a lot of orders. We're getting inquiries from India's friendly allies about this, and given the fact that the product that we have are actually been battle-proven, the government itself, as you have seen, that they almost placed 800 crores worth of anti-drone orders on us post Op Sindhur.

There are a lot of upcoming tenders. We saw that tens of thousands of crores of money has been allocated to them, and there is lot of tenders are going to come.

I think we will be one of the beneficiary of these anti-drone system tenders. In the meantime, as we have been saying that some simulator orders have been pending, I think the start has happened that we got the 177 crores order.

I think some more orders will be coming through. We expect that to happen, some order to come through pretty soon and one larger order that may take a couple of months.

That should actually improve our simulator order book position substantially. Similarly, the demand is, even foreign countries, what has happened is these guys were never prepared.

They had never had any training because it was a peaceful country. Now, with all these wars happening, there is almost a rush happening especially for simulator because that is the only way they can train in a compressed manner, and everybody feels that the war is knocking on their door.

We have seen, and the technologies that we have, we have seen Agniveer's 100-week training program was shrunk to 30 weeks after using our simulators. I think the simulators also are becoming very important, and we are trying to get into our traditional markets of Middle East, Africa, Southeast Asia and CIS countries.

Now we are also looking very, very aggressively into both North American and EU markets, and of course from North America, we're tapping into the South American markets. These markets we think are very, very big, and, for example, one estimate is that the TAM for the products that Zen makes in US itself is about $10 billion.

That's how huge that is, and we have started talking to the Marines there to the primes because we are not eligible to be directly bidding, we're trying to be a subcontractor and try to get into those markets. I think it's a very, very large market, and it's playing out now as we speak.

That there's a lot of interest, and again, we also have a special position with EU because we make simulators for the Russian equipment, and that's what they would like to actually practice on and how do we thwart the attacks from possibly Russia kind of thing. Yes, I think we are in a very good position, and we think the next few months will be very interesting.

Sir, thanks for the great explanation.

Yeah.

Lastly on this high-altitude anti-drone system, sir, what is the TAM and maybe this is India's first one, but maybe in the other parts of the world it's already existing. What could be that TAM for even if we consider the exports also for this product?

I think we are waiting for this man-portable anti-drone system to be evaluated by the armed forces, and we think that it's a very, very large market, and the fact is that government has to publish the tenders, and we expect that there'll be some tenders in this regard, but we don't have a real estimate at this. The government is across the whole gamut of simulators.

They're starting from the actually border-based, then they're going to tank, then they're going to infantry. I think it's a very large market, and I'm not able to give a right figure, but it's going to be very large.

Sir. Just a follow-up on that one, if I may ask.

If we come up with some new product which is useful for our defense system, how we will exhibit that product to the government so that they can think from their operation point of view and maybe they can understand the significance of this product. Then they can think of tendering though for this product?

Yeah. It's a valid question in the sense that whatever product we are developing, we actually are continuously engaging with armed forces and telling that this product is available.

I think with this new Defense Acquisition Procedure, if that comes in, they actually have provisions for actually buying new products and then trying it out, and then scaling the order. They will probably see a basic trial and say, okay, we want to try it out in the field, and if it works in that trial, they'll scale up.

The new DAP 2020 is yet to be announced, but in the draft this was there. I think, yeah, but to your question, yes, as a company, we do continuously keep telling our customers what exactly we are developing and what is the future development path, and they do know what we have developed much in advance, and we actually share with our other stakeholders.

Thank you, sir. That's all from my side.

All the best.

Thanks, Bala. Thank you.

hello sir. I just wanted to check on the simulator market once because we've not been growing into that.

I have been following this for a while now, and seemingly the number of armed forces which are using simulators is very less in India. That itself was supposed to grow exponentially.

Ex of anti-drones also, we do not see simulator orders also perform very well in the last one or two years in terms of growth rates. How do we see this market only from the Indian perspective?

Pawan. The thing is, again, I was telling that the order that we got recently of 177 crores was simulators, and we had talked about almost 7 to 800 crores worth of orders out.

That is actually playing out now. We expect more simulator orders to come as we go into the next couple of months.

Again, I have been talking like this for a long time, but actually I think one order has come, I think the second order may come. Maybe the third order may take a bit of a time, but that will also come.

I think the simulator market is expanding, and we have got into the flight simulators also, as you saw in the presentation, that we have got into flight simulator. We have made a simulator for C-295, the Air Force entry is a very crucial step for us where the simulators are very, very required even for a regular practice.

Every pilot has to block certain number of simulator hours to even fly. We are getting into that also, but as far as the Army and Naval market, in which we are dominant, these are very big, and as we speak, there are a lot of studies that have come out and that are again telling the government that you should get into simulators, and the government is actually really increasing the simulator budget.

I think there has been a gap in the orders to come, but again we're starting getting the orders. I think this will be the start.

As we go into the future, I think there'll be some pleasant surprises. I think there are some couple of very large orders we are expecting.

I think overall, I am happy with the way the simulator thing is going. Of course, I wish that the government moves faster.

Please go ahead. Yes,

just to put a number to it. We are expecting some 4,000 crores of revenues for the next two years.

In your estimate, what should the simulator number be out of this 4,000 guidance that's

been guided so far? It'll be about 2,000 about to about 2,000 crores crores in that.

That's what we're expecting. With some pleasant surprises probably in Q2 and Q3.

Yes, yes. No, no, the order-wise may take a little longer, the very large order we are talking about, but we've sometime back said that that 7 to 800 crores worth of orders were in the pipeline, I think those may materialize very much, much sooner than Q2, Q3, yeah.

Understood. And Then

Q3, yeah, definitely, yeah.

A little bit of update probably on the Hyperstrike. I read that this sort of area is being probed by multiple peers out here, and the timing is more critical in terms of this long-range strike drones of this long range.

Where are we and are we on track to get this by FY 2028?

Yeah. The product has been demonstrated and the sense that the payloads, etc., integration is going on.

This is not a long-range thing. This is what we call it as it goes very, very fast.

We have actually flown at 300 very comfortably, but now we are really testing the limits of physics in the thing. With the payloads and all that, when other drones are actually very near, we try to send it.

The range typically would be within 20 km range we go and destroy the incoming Shahed kind of a drone. That is what this Hyperstrike interceptThis request was blocked by Gemini's filters.

They can occasionally trigger by mistake on safe coding, security, or biology-related queries. Please try rephrasing your prompt.

You can [send feedback](https://ai.google.dev/gemini-api/docs/troubleshooting#file-bug) or read more about [our policies here](https://policies.google.com/terms/generative-ai/use-policy). It is an interceptor drone.

Yes, it is meant for, yeah. This is at a short range, it does it, but it goes very fast.

Even if it misses, it chases till it actually destroys the incoming drone. That's what the interceptor drone does, and I think this will make us completely safe from so-called Shahed drones from which our enemies have.

I believe there was one interceptor drone by Paras launched very recently. How do we stack up against them?

I'm really not aware of what they have launched, but our product is completely in-house. We have developed the technology completely in-house.

I'm really not aware of that Paras. If some of the subsequent speaker can just tell us the details, then maybe that would be of interest.

What we are developing is, I think absolutely on the cutting edge, very fast, very reliable, and very reasonably priced.

Understood, sir. Thanks a lot.

That's all from my side.

Yeah.

Hi, sir. Am I audible?

Sir. Congratulations for introducing new product line recently on the Kargil Vijay Diwas.

Sir, my first question is about as you have said that in US, Zen Technologies' addressable markets are $10 billion for all of our products. What gives us the right to win in that strict regulatory market, and how are we preparing ourselves for that type of market?

In the sense that, very frankly, the market size is very large. US is one of the very closed markets and very difficult for an Indian company to go and sell there.

How are we approaching is that first we are trying to get all the compliances done. They're very heavy, strict compliances.

I think they should be there because they're letting a foreign company into their ecosystem through the FOCI clearance, ITAR clearances, all those clearances are going on now. Once they feel comfortable with us, then that is when they will actually let us bid directly.

As of now, the strategy is that we should align ourselves with the prime vendors. If somebody wants to come to India, they would try to align with Zen and try to sell it through, maybe we don't do that much, but if really there is a real high-tech company, we would like to collaborate with them and offer something to armed forces.

Similarly, in the US, we are looking for companies that want to actually do something for us and have the access to the customer while we have the product, and we want to collaborate with them and supply. This is the market that we're looking at that we expect some orders to come through.

Again, this will not be very large. Even though I said $10 billion is for the next 3 years, actually.

That is the market size. We have very modest ambition that even if we touch $100 million in third year, we should be very happy with that result.

It's a long-term game, and we expect, given the fact that our products are very well received in exhibitions in US, we expect that some breakthrough may happen. If luck favors, it may be much, much larger breakthrough.

As of now, I think year or two, there's no big news from US as such, or the EU. Maybe third year onwards, something may happen there.

Sir. Sir, my second question is about our solutions.

We already have the strong hold in Army's solution, right? What are we developing in the Navy and Air Force, and can Navy and Air Force be the same addressable market and growth for Zen Tech's as Army in the coming months and years?

I think Navy is a very big market, because the very fact is that, even though we are obsessed with our East and West border, which is shared by our lovely friends, we have the rest of the whole peninsular place, which is completely unguarded. That is where the next power game is being played, which is the Indian Ocean.

How do we actually control that ocean without being trained? In terms of training simulator, there's going to be a very, very large market.

I think the lot of sea-related products are also going to have a lot of demand, even though we are not much into that. I think naval simulators are going to be very, very big, and they want to train.

How do you actually to see certain kind of situations? For example, I see a swarm of drones coming and attacking me.

How do I actually simulate that? If I really want to practice, I cannot practice in reality.

It has to be through simulation. If 100 drones are coming, how do I neutralize the 100 drones on a ship, or forget about ground?

All these things have to be practiced before the things happen, and they are not very far away. 100 drones coming and attacking a ship, or even a army post or something.

We have a drone and counter-drone simulator where the drones actually simulate the swarms being sent, and counter-drone simulators, the operator is struggling how do I neutralize, what is the order, what hard kill option do I activate. All these decisions have to be taken, and this cannot be done in practice except through simulator.

We have those simulators. I think, yeah, for Navy also, these counter-drone simulators are there.

Of course, they are very well entrenched in the submarine, the tactical trainers. We have the bridge simulators, the engine room simulator, etc.

We all have those simulators, which is again very, very big and growing market.

I think,

yes, we are there. Of course, now we're trying to push our solutions into Air Force, and we think that there is a huge demand for the Air Force simulators also.

We have yet to get some orders or any indication of participating tenders in that regard.

In the Navy front, do we have any developed products up till now, or are we in the progress of developing the product?

Naval simulators we have. We have a lot of those simulator.

In fact, if you just go to the website, ARI Simulation website, you will see that we have almost all kind of simulators, and with Zen's capability, we are giving weapon simulators for the Navy ships also. We have the complete range available for the bridge simulator, tank simulator, submarine simulator.

Naval simulator, we have a whole range. I think we have the most exhaustive range in the world.

Nobody else has like Army. It is in the Air Force that we have just recently started.

Sir. Understood.

My last question is

Yeah. I have one question for Ashok, sir.

Hello?

Please go ahead, Ashit.

Yes, sir. Sir, just one basic question with regards to anti-drone system.

The speed at which the drones are being flown, I suppose from 240 km/h or 300 km/h to 600 km/h. In that scenario, our anti-drone system, if parameters are let's say radius of 5 km or 6 km, how can they intercept and stop?

Ashit, there are different ways of stopping the drones. One is, number one, that are they being controlled from the ground?

Is there a ground to drone communication happening? In which case, we will be using the jamming system.

We'll just jam the system and we will be able to stop the communication. When the communication stops, typically what happens is the drone itself gets lost, and say either it lands itself wherever it is or it goes back to the home station.

We have neutralized the threat. In case it is coming autonomously using the GPS thing, then what we do is we try to spoof the GPS and say that you're not in India, you're probably in Pakistan or Baluchistan or whatever.

Mislead, and it gets again disoriented and the same two things happen: back to home or land where it is. Third is they use autonomous AI-based intelligence in the sense that what happens is the drone has the complete topographical map, and the camera keeps taking the live photograph and tries to match and says, okay, I'm in this location, I have to go in this direction.

Even if you jam, it doesn't work. In those cases, the only way to destroy them is through actual hard kill system, weapon system.

You could either shoot them down, very difficult to shoot at the speed you are saying. The only possible way to block them is through interceptor drones, that is what we are doing.

We should be able to neutralize the incoming interceptor drone with that. I think interceptor drones are the solution, but people are making this HPM-based, high-power microwave-based solutions are there.

We have a laser solution that we are offering to the armed forces. It will be a combination of solution how do you actually jam the thing.

It is the challenge. At 6 at 600 km/h, it will become a challenge, but I think we are coming up with a solution for that.

At a lower speed of up to 400, we can handle the threat of drones. Actually drones flying more than 400 km/h are very, very few.

We will be coming up with a solution for that.

Okay. Basically, sir, my question was because when I am having drones flying from the opposition side, which is, let's say, 300 km inside, and from there when they are flying, by the time they reach the borders, I have very less amount of time to kill them or confuse them or spoof them, as you say.

In that scenario, a combination of your anti-drone system, does it involve UAV whereby your UAV would kind of be there in the air and also identifying those flying drones well in advance and then using your technology of spoofing and other things?

That is right. Once the drone is detected on the radar, the action is typically dictated in collaboration with AI.

AI will actually tell you this is the speed at it coming, this is the solution that you have. The man in the loop when he has to initiate the hard kill.

They will immediately say that, okay, immediately let me launch a UAV or I can destroy it with a particular type of a weapon. That decision will be authenticated by the man in the loop, because for any kill, hard kill, the human element will be there, and they say yes to the suggestion, and the drone goes and counteracts the drone immediately.

What you're saying is, listen, they are flying at 5 km/min, at 300 km, that would be the speed they're flying at. Can we really stop them?

Yes, we can stop them. The answer is we have the solution for that at that speed, we can definitely send our counter-drone systems, and the UAV is much faster than that.

Wherever it is coming, it is being detected at a probable distance of 100 km also. We're talking about 20 minutes to reach us.

Can we stop in between? Yes, my answer is yes, we can do that.

That would decide our overall market size. Market size of anti-drone systems

It's all huge. It suddenly jumped from something to something.

What is the size? Because

that's where, say if my system has that kind of a power, then my market size would expand manyfold.

I think I'm now getting what you're saying. Basically, these kind of thousands of drones would be required to actually stop those incoming, because now it's not going to be one drone or three drones being sent.

They will be sending a swarm, hundreds of and thousands of these drones. For example, we look at China, they say that each unit is having 1,000 drones.

Each infantry unit is having 1,000 drones. By the time they're exposed, they would have destroyed the armed forces if they don't have counter-solution for their drones.

Yes, the market for these interceptor drones is going to be very, very large, especially for the Shahed class. What I was talking about the infantry maybe smaller kind of solution.

I think the market is very large. You are right about it.

Thank you, sir. I'll come again.

Hi, sir. Am I audible?

Hi, sir. Good evening.

First my question relates to your recent press release on Vector Technics. Just 1 minute.

No, I'm not able to hear him. There's no clarity, sorry.

My first question relates to the recent press release

for Vector Technics. Sorry, Shivam, it's not clear.

I'm sorry, am I the only one? I don't know, but I'm not able to hear it clearly.

Is it better, sir?

Much better, yeah. Please go ahead.

First my question relates to your recent press release on Vector Technics. In that, we mentioned that the capacity expanded to 3 lakh units.

Do we sell the propulsion stack to other drone manufacturers or is it only for ourselves to sell to the market? What is the revenue contribution that is coming, if at all you can mention, for Vector Technics for us?

Second, any update for our recently launched Integrated Smart Border Suite? These were my questions.

Okay. For your first question, Vector Technics has expanded its capacity to almost to 300,000 units.

Vector is very, very agnostic. They don't care whether Zen wants or anybody wants.

Everybody is a customer for them. They are looking to sell it to each and all the customers in India.

What the strange part is, almost 50% of the queries that they're getting are from overseas, including Europe and America. Last year, I think they had done very small turnover, but almost 50% has been sent to overseas.

I think the product that they are making is really world-class. The second is that they're selling to all Indian participants and friendly nations Indian friendly allies.

The third thing is that we expect that they're waiting for orders to come. I think what I hear from Vector is that the drone segment itself has slowed down.

They are not getting as many orders as they should be, but once orders come to the drone companies in India, I think Vector will be the first beneficiary. Then, of course, their export market, I think, is going to be very, very large as we go.

I can't put any figure to that, but I think it's a very good bet that they will be able to use the whole capacity if the orders come. If the order come, even at Rs 10,000, that's almost, I think, 100 300 crores or something.

300 crores, yeah. I think that could be the potentially revenue contribution from them.

I think they're doing more technologies, and I think it's a much bigger story than what I would assume. Let us wait how it plays out.

With respect to the Integrated Smart Border Sorry, Shivam, you were saying something or?

Yes, sir. Just a follow-up on that.

As you mentioned in the press release that most of the propulsion stack is currently being imported by the domestic drone manufacturers. Since our subsidiary is one of the first to build everything in-house, for the entire Indian drone market, we would be a direct proxy play for all the players out there in the drone ecosystem.

We would be able to supply for them the propulsion stack? Yeah.

I'm not so sure how many the other people are there, but I think what Vector makes is really cutting edge and one of the best in the world, forget about India. I think every order comes potentially, Vector hopes to win from that.

You are absolutely right. It's a proxy win for Vector.

Let us hope how it translates in reality. First let the orders come to the drone companies from the armed forces.

I think then we'll see how much of the benefit is derived by Vector.

Yes, sir. Secondly on the Smart Border Suite.

Yes, I was going to answer that. Integrated Smart Border Suite is basically a solution where there are multiple armed forces.

There is BSF, there is state police, and there is the Army itself. What happens is everybody's manning the borders by themselves.

Now, this integrated smart border management system is actually seeking that all those different kind of sensors by different units, including human intel, should be fused into a common operating picture and shown to the decision makers. That is what the one which we released was doing.

As we speak, we are talking to various security forces and showing the system. We expect this is a very large market.

I think there will be multiple players, I think, in this game because it can't be serviced by one company, is what my feeling is, even though we would love to service as a company. I think there will be multiple players, and I think Zen will definitely be a beneficiary when they roll out this in terms of placing orders, etc.

Thanks for taking my question. To Ashok and Hari, I just want to step back a bit.

When I see Zen from the outside over the last 3 to 4 years, right? You have moved from being, say, one or two capabilities to five capability company.

You have moved from just a core simulation for Army to now simulation for all the three forces. You have, just being a technology provider to now even being an active warfare, hard kill, weaponry, everything, right?

When we look at the order flow, it does not really justify the kind of transition this company has done over the last few years. If you can just help me understand, two things across this is: one is, if you think across each of your capabilities, right?

Is there some external challenges or internal challenges, capability-wise, I'm talking about, which is actually leading to this softness in order flow? Second is, if you can also help if there are capabilities which we call out, but maybe will take some time to mature, maybe it's not an FY 2027 game, but say an FY 2028, FY 2029 game.

If it will be very helpful to just understand across five capabilities which year does the technology be mature or, say, actively contribute significantly to the order book? Second, how should we think about the order flow in view of this transition you have made?

Thanks for the question, Gautam. The way we look at it, obviously, we are the leaders in the simulator space now almost for 30 more than 30 years.

Anti-drone systems, obviously. These are the two main segments which, to answer your question, are mature, and there is a sizable portion of order inflow which has happened the past couple of months.

In addition to that, the other new capabilities that we've built, especially in the drones, in the robotics space, and in the drone propulsion. Drone propulsion is something that, like Ashok sir mentioned with the earlier participant, there is a huge market for the drone propulsion, and we should be seeing those orders materialize for Vector Technics.

Robotics is something that we've just entered into, and you would've seen that we've launched a new product called Vrishabha, which is Rishabh, which is the unmanned ground vehicle. We've done our internal trials for it.

We expect to take it to the customer and do the trials with them, but it is going to take some time. To answer your question, robotics is something that is going to take time.

We're doing some heavy investment in other key areas like autonomous UGV, vehicles, and for defense purposes and all that. These are investments for the future.

Most probably, it will take at least 2 to 3 years for this products to mature, but we are very hopeful because these are the technologies which are required for the future and globally also are required for any defense or government body to have. I hope I answered your question.

To summarize, basically, simulators and anti-drone systems is something that is going to drive the company forward at least in the foreseeable 1 to 2 years. Whatever we've launched in the last couple of months, let it be the interceptor drone, or let it be the other hard kill options, which is the ammunition and all, these are going to complement our existing products, and these are the need of the hour for the customers.

The investments that we're making in robotics, autonomous vehicles, and other capabilities that we are trying to build is something that you will start seeing the benefit in next two years at least. No,

understood. Then just if you can help me, when we talk about your core simulation and anti-drone market, right, or the order flow, can you just help us?

I see simulation you have started to get some orders, but anti-drone still seems to be a bit softer. Is it an internal issue with the technology evolving so rapidly that you have to just keep on upgrading the systems, or is it something with the customer which is causing a problem, like they are not able to order or they are not clear with their requirements?

If you can just give us some thought process around it, and how should we think about it in the next, 9, 12 months in terms of the order flow and the size? That will be really helpful.

Thanks.

I think, Gautam, this is mostly demand-related issue, more than our ability to supply. I think I'm definitely expecting some competition to come up and some place where we don't win kind of a thing, even though last few tenders we were single vendor, there was nobody in the competition.

Everybody was disqualified because this IDDM, the government was looking into the codes, the drawings, the design, etc. Nobody came, but actually nobody got qualified even technically.

I think that'll change as we go ahead. I think even the requirements will be so varied that Zen will not be able to cater to all the requirements.

There will be something in which we'll qualify and do very well, in something we may be disqualified. I think the market is expanding and it is going in all directions.

There are very specific needs, multiple verticals emerging. I think, but as of now, the problem is of demand.

There are no tenders that have come out for anti-drone systems and there are no simulator tenders that have come out. We are expecting that the fast-track process with the government actually granted recently, all those tenders are going to come in, and we will be bidding in that.

Those orders will come very, very fast. It's not that they're going to take forever.

I think they will be finalized in a few months. I think that's going to be the thing.

To your question, the issue is not with Zen, but the government has not floated any tenders in the recent times. As and when they float, we will be bidding for that, and we will be hearing the good news.

Sure. Thanks.

We'll wait for that. Thanks.

Thanks, Gautam, yeah.

Sir, wanted to get a sense of the market potential over the next 3 years in simulators for the three wings of our armed forces, that is Army, Navy, and Air Force. What would be our strategy, go-to-market strategy regarding the Air Force simulators wherein we are still, getting our foot in?

Some sense on that, sir.

I'll start with the Air Force thing, that Air Force is a market that, again very strong market, and that's the reason we were actually looking for acquisitions. Now we have started developing our own simulator.

The first simulator was the C-295 that was shown in the presentation. Of course, all related technologies of flight simulator, including 3D motion platform, etc., are already available with us, and we can make a full motion simulator.

We are now started bidding and inviting Air Force to come and see our capabilities. They are shortlisting us for all future simulators in Air Force.

That is one thing. With respect to the Army and Navy, I think our estimation is for both the markets, it's upwards of about $2.5 billion.

That's about 25,000 crores. We expect that and again, when will they play out?

That's a question that we are not able to answer. They are definitely going into from multiple hundreds, they're going to thousands of crores, is what we feel, in the next couple of years.

I think the growth prospects there are very large in both Army and Navy. That is the broad answer to you, Sanjeev.

I think I've addressed your Sir.

Sir. Sir, my second question regarding the tank gunnery order.

These kind of orders, they come on a yearly basis or like when we have got this order, the immediate requirement across India has been fulfilled, and maybe the next order may come 2-3 years down the line when the army may need some modification or a different product? What is the recurrence?

Can this order similar order come next year also or the immediate requirement is fulfilled? That's what I wanted to understand.

Okay. Sanjeev, just to tell you how we estimate the market size typically is, let us say that as per the Wikipedia, Government of India has 4,000 tanks.

Let us say, it's a different number, but I'm just for the sake of simplicity. For 4,000 tanks, there are three operators with three backup operators, the driver, gunner, and the commander.

These guys need to be trained. Now, how much time should they be trained is a question.

Typically if you say they have to be trained for 10% of their time out of 2,000 hours, they need to be trained for 200 hours on the simulator. That would be say that we have 6 * 20 4,000, 24,000 soldiers who need to be trained for about 200 hours.

That would mean that there is a demand for 48 lakh hours of training. Are you with me here?

Yes, sir. Yes, sir.

Yeah, 48 lakh hours of training. For what the 48 lakh hours training, how many simulators are required?

Just divide 48 lakhs by 2,000 hours, each simulator has 2,000 hours. That is that will give you 2,400 simulators.

Whatever they have procured till now is just a small slice of what their requirement. Even the order that came, 177 crores, is actually not a new order.

It was for integrating existing simulators so that the armed forces could train as a and the whole tank could be trained as a integrated unit. The driver and the tank driving simulator and the tank gunnery simulator, both are combined now and giving various kind of situations, etc., including AI were there.

It is a So, to your question, this is a very, very small part. We didn't get it.

This is a very limited number of orders. Just multiply it with maybe 100 times or something like that to really get the estimate of the size of the order.

At least do it 30 times of this. We think so the market size is very large.

The orders that we are getting are only part of the thing and a concept proving at this point in time. Again, typically once we get the order, the order life cycle is 10 years, and after the second year, third year onwards, we get the AMC.

It generates revenues for us even through the life cycle of the thing. 10 years later, they are replaced.

Number one, the market size is very huge, the order they have given is very, very small part of it they are addressing, and second is even for this small part, they're generating revenue typically from the third year onwards. I think I'll stop here, but I hope I have answered your question.

Understood, sir. Thank you, and all the best.

Thank you. Thanks, Sanjeev, yeah.

Hi, sir. Thank you for this opportunity.

Sir, what I want to understand from you is that are you experiencing a change in the type of ordering or the change in the ordering scenario? Earlier the way we used to get was like a 2-year, 3-year ordering.

Now from that, are we getting more of like 12-month ordering? Is this like something which is happening from a industry-wide angle?

Because it has been a while since a lot of private companies are getting just 12-month orders, 12 to 15 months order and not a long-term order. Are you experiencing that, and that is how the industry is shaping up now, or that is just a short-term scenario for now?

I think, because of the threats that are being posed, government was going in a fast-track mode to acquire faster. In fast track, typically the execution cycle is 1 year, there the thing has to be done.

To your question, is everything going fast-track mode? The answer is no.

The government is going on regular procurement in some channels where they don't have a urgency. Again, the industry would love to have this 12-month cycle more than the larger cycle, which can take for anywhere up to 3 years.

Yes, we are getting more and more this FTP-based orders, but still the larger very large orders will are being routed through the regular procurement route.

Got it, sir. Sir, can you help us with I'm sorry if this is a repeat question as I joined a little late, but can you help us with what are the orders which are there on the expected side of it, say, for the rest of the year?

If there are any major orders that you could highlight as to which are expected in near term?

I was talking about the simulator orders that we have been saying that we're going to get in the next few months. I think that one of the order we already got for 177 crores.

There are a couple of more orders. One order, I think, may come sooner than later, may be very, very soon.

The second order, again, we think it'll take a couple of months. All together, I think we had said that 7 to 800 crores worth of orders are incoming.

I think that's going to happen soon.

Got it, sir. Sir, lastly

That's only for the simulators. Anti-drone system is a different ball game.

That's going to be much, much larger in scope, and that'll run into, I think, at least a couple of thousand crores of rupees.

When you look at it from an overall point of view, overall how much order wins are you expecting in, say, FY 2027?

No, no. What I have learned from frequent predictions is not to make any prediction, I will not make any prediction.

I think it's going to be very large, Dipen. I think strangely, a lot of companies are going to get a lot of orders because there is so much in the works that I don't think any one company can really service them.

I think it's a very, very large market, and I think it's a fantastic time for the defense companies as a whole, defense industry as a whole. I think we look forward to getting the orders, executing them, making India stronger, completely unbeatable in war.

We look forward to that.

Got it. Got it, sir.

Sir, that's all from my side. I'll connect again if there are any more questions.

Sure.

Thanks, Swapnil. Most of the points were covered by that, but overall, that what I want to say is, we are very excited as a management of the company that the way things are going.

Orders have started coming, and we expect new orders to come in for simulators and, much later the orders from anti-drone systems. One question that nobody touched upon was acquisitions, what's happening with acquisitions.

We actually are looking to acquire more companies, and I think they will really add new dimension to the company the way ARIS acquisition and other acquisitions have happened. I think this will be very, very interesting acquisition with huge revenue potential.

We will be acquiring, and we are looking around for companies. I think that will be very, very good news for our investors.

Fortunately, even though we have deployed most of the QIP funds, still some funds are still there. Fortunately, we have built up enough the cash chest to actually invest in very, very interesting companies.

That is again very large. This was one part that wasn't covered.

Again, the Integrated Smart Border Suite is something we are excited. I think this is again a very large order, and Zen is really geared up to take advantage of that.

There are the new things coming up, the laser-based directed-energy weapon systems, and some of technologies are really in the works in R&D, which we cannot tell at this point in time. As we go ahead, we'll be announcing them.

They're really cutting edge, not only from India's point of view, but world's point of view. I think we are looking forward to that, and thanks for supporting us all through this.

I think there have been difficult times for Zen, and I see that, in spite of quite testing times, you have stayed with us. I think the time has come that good news will start trickling in so slowly, and long-term holders will be rewarded sufficiently.

Again, thank you so much for your support.