On Wednesday, the leading provider of counter-drone technology and defence training solutions Zen Technologies shares rose 8% to Rs 319.50 on the BSE in intraday trade.

Shares of the small aerospace and defence company have risen 73% so far in 2023, compared with a 6% decline in the S&P BSE Sensex.

Zen Technologies is engaged in the indigenous design, development and manufacture of defence training systems based on sensor and simulator technology and has been relentlessly providing defence training solutions and seamless services to the Ministry of Defence (Armed Forces), Security Forces Police and Paramilitary Forces. The company produces land-based military training simulators, driving simulators, live equipment and counter-drone systems.

On March 24, Zen Technologies announced new orders worth Rs 127 crore. The company’s order book position on December 31, 2022, is Rs 404.44 crore.

The company believes the next few years will be very positive and expects to sign several more significant contracts soon. Zen believes it will be essential in the government’s renowned Agnipath initiative and training modernisation efforts.

“On the order book side, we expect to win some major orders because of our active involvement in various defence activities. Also, we expect more large orders from the Government of India’s (GOI) aggressive procurement,” Zen said on January 28 when announcing its third-quarter results.

The Government of India has formulated several measures and a strict timetable for their implementation. The government’s heightened focus on Make in India and the Atmanirbhar Bharat movement has created a favourable environment for the defence industry to make in India. It added that this should be a strong impetus going forward.

The centre has laid out several measures and a strict timeline for their implementation, including an allocation of Rs 52,000 crore for equipment procurement for the domestic defence industry, with an export target of Rs 35,000 crore by 2025, the company said.

Meanwhile, Zen posted solid earnings for the quarter that ended December 2022 (Q3FY23), with consolidated profit after tax (PAT) at Rs 11.94 crore compared to the same period last year (Q3FY22). for a loss of Rs 0.22 crore. Sales more than tripled to Rs 52.48 crore from Rs 16.26 crore. Ebitda margin improved to 34.27% from 11.19% in Q3FY22.

The company’s strong performance was driven by positive growth reported across business verticals, AMC and Devices. According to management, equipment sales are a vertical business, growth visibility continues to be high, and opportunities continue to emerge. Management remains very confident that these revenues will be recognised in the current fiscal year with possible spillover into Q1FY24.