Zen Technologies, Mazagon Dock Shares Fall Up To 10% Today: Here Is Why

Defence stocks are having a rough start to the week. A mixed set of quarterly results from Zen Technologies and Mazagon Dock Shipbuilders, combined with a leadership change at Hindustan Aeronautics Limited, has put the entire defence pack under the spotlight on Monday morning.

Zen Technologies

Zen Technologies had a tough quarter. Revenue fell 45% year-on-year, sharper than the 35% drop analysts had modelled. The rest followed:

• Earnings Before Interest, Tax, Depreciation and Amortisation: Down 63% year-on-year (YoY).

• Net profit: Down 58% YoY.

• Margin contraction: 1,400 basis points YoY, 900 basis points sequentially.

• Employee expenses: 22% of revenue vs 9% a year ago.

• Manufacturing expenses: 7% of revenue vs 2% a year ago.

• Material costs: 22% of revenue, improved from 27% a year ago.

• Q4 order inflows: ₹431 crore.

• Total order book: ₹1,336 crore vs ₹1,083 crore in Q3.

• Domestic order book: ₹1,247 crore.

• Export order book: ₹89 crore.

The company blamed FY26 delays on order conversion rather than demand. It says a significant portion of the current book is scheduled for execution in FY27 and the pipeline remains strong. Whether the market buys the FY27 story depends entirely on whether the orders start flowing through in the first half of the year.

Zen Technologies Ltd shares were down 10% at 11:40 AM, trading at ₹1,491.

Mazagon Dock Shipbuilders

Mazagon Dock Shipbuilders beat its own revenue guidance for the full year but costs ate into the story.

Mazagon Dock Shipbuilders shares were trading at ₹2631 at 11:40 AM on May 4, down more than 3%.

Here is what the numbers looked like:

• FY26 revenue: Crossed ₹13,000 crore, up 14% YoY, ahead of 9% guidance.

• FY26 margins: 17.4%, down 86 basis points, hit by higher production and other expenses.

• Other expenses Q4: ₹477 crore, up 76% YoY and 241% sequentially.

• Total production costs Q4: 73% of revenue vs 64% a year ago.

• Material costs Q4: Up 67% YoY.

• Subcontracting expenses Q4: Down 30%.

• Provision write-back: ₹193 crore, supported profitability.

• FY26 provisions: ₹356 crore, halved from last year.

• Order book end Q4: ₹20,535 crore, down 14% sequentially.

However, a 241% sequential jump in other expenses is the number that can make investors uncomfortable. Sequential performance was weak and margin compression was visible.

The bigger watch point is the P75I submarine project. Mazagon Dock has guided for an order book crossing ₹1 lakh crore by FY26 end, contingent on that order landing. Negotiations are done. Whether a formal order update comes through on the earnings call is the single most important catalyst for the stock right now.

Also Read - Auto Industry Faces ₹25,000 Crore FY26 Hit From End-of-Life Vehicle Rules

Hindustan Aeronautics Limited

The leadership change at Hindustan Aeronautics Limited is making headlines. Dr DK Sunil stepped down as Chairman and Managing Director on April 30 upon superannuation. Kota Ravi stepped into the role from 1 May.

He earlier served as Director (Operations) at the company. Over the years, he took on several key roles. He worked as Executive Director and General Manager of the LCA Tejas division. He also handled corporate planning as Executive Director.

The transition is orderly and the incoming chief brings direct programme experience. Markets will watch whether the new leadership changes anything about Hindustan Aeronautics Limited's execution pace or contract pipeline over the coming quarters.

At 11:30 AM on 4 May, HAL shares were up by 5%, trading at ₹4580.

Source:

CNBC