Zen Technologies Limited filed its Business Responsibility and Sustainability Report (BRSR) for the financial year 2025-26 with the National Stock Exchange of India Limited and BSE Limited on August 6, 2026. The submission, made pursuant to Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, details the company’s adherence to environmental, social, and governance standards. The report is prepared on a standalone basis and forms an integral part of the company’s annual report for FY26.

The filing was authorized by Sourav Dhar, Company Secretary & Compliance Officer, who also serves as the designated contact for queries regarding the report. TUV India Private Limited provided reasonable assurance for the core indicators within the BRSR. The company operates from its registered office in Hyderabad, Telangana, and maintains a paid-up capital of ₹ 9,02,90,356. Its primary business activity involves designing, developing, and manufacturing combat training solutions for homeland security and counter-drone technology, which accounts for 100% of its turnover.

Workforce and Human Capital

As of the end of FY26, Zen Technologies employed 421 permanent employees and 366 workers. The gender distribution among permanent employees showed 84.56% male and 15.43% female representation. Among workers, 64.20% were male and 35.80% were female. The company reported no differently abled employees or workers during the period.

The Board of Directors comprises six members, with two women representing 33.33% of the board. No women are currently part of the Key Management Personnel (KMP). The turnover rate for permanent employees stood at 14.01% in FY26, down from 16.96% in FY25. Male employee turnover decreased to 9.50% from 14.43%, while female turnover rose slightly to 4.51% from 2.53%.

Environmental and Operational Metrics

The company identified technological advancements, government regulations, and cybersecurity as key material issues. Zen Technologies aligned its policies with ISO 9001:2015 for quality management and ISO/IEC 27001:2013 for information security. The firm does not fall under the designated consumer category of the Performance, Achieve and Trade (PAT) scheme by the Bureau of Energy Efficiency.

Environmental data, including energy consumption, water usage, and greenhouse gas emissions, was assured by TUV India Private Limited. The company reported no significant adverse environmental impacts from its value chain. Waste management practices include handing over food waste to the Municipal Corporation and selling scrap waste to local vendors. Electronic waste is disposed of through authorized recyclers, and unused batteries are returned to suppliers.

Corporate Social Responsibility and Governance

Corporate Social Responsibility (CSR) is applicable to Zen Technologies under Section 135 of the Companies Act, 2013, given its turnover of INR 423.76 Crores and net worth of INR 1,821.96 Crores. CSR initiatives are managed through the Veer Sammaan Foundation, focusing on education, sports, health, and environmental sustainability. In FY26, 20,110 individuals benefited from education promotion projects, while 33 benefited from sports promotion, with 100% of beneficiaries coming from vulnerable or marginalized groups.

The company reported no monetary or non-monetary fines, penalties, or legal actions against directors or KMPs during the year. Accounts payable days increased significantly to 45 days in FY26 compared to 11 days in FY25. The company maintains a zero-tolerance stance on bribery and corruption, embedded within its Code of Conduct, which applies to all employees and stakeholders.

Zen Technologies Limited reported consolidated revenue of ₹687.69 crore for FY26, down from ₹973.64 crore in FY25, as order conversion timing extended beyond expectations. Profit after tax (PAT) was ₹193.45 crore after adjusting for non-controlling interests, compared to a reported PAT of ₹217.93 crore. Operational EBITDA stood at ₹247.24 crore, representing a margin of 35.95%, while reported EBITDA was ₹332.66 crore. The moderation in revenue reflects the milestone-based nature of defence contracts and shifting procurement priorities, though management noted that underlying momentum remained robust across simulation systems and counter-UAS technologies.

The company maintained a strong balance sheet with cash and bank balances of ₹1,308 crore and no debt. A key highlight was the consolidated order book, which stood at ₹1,336.04 crore as of March 31, 2026, supported by new order inflows of ₹431.36 crore secured during Q4FY26 alone. The standalone order book was ₹1,222.6 crore. Management indicated that the majority of the order book is scheduled for execution from FY27, with approximately ₹1,000 crore expected to convert into revenue during that year. The Board recommended a final dividend of ₹1 per equity share, subject to shareholder approval at the 33rd Annual General Meeting scheduled for August 29, 2026.

Financial Performance

The financial results for FY26 reflect a measured profile compared to the exceptional growth seen in the previous year. While revenue declined, profitability margins remained stable, adhering to the company’s long-term guidance of a 35% operational EBITDA margin and a 25% PAT margin.

Order Book and Growth Drivers

The order book remains a critical indicator of future revenue visibility. The bulk of recent orders are slated for execution from FY27 onwards, suggesting a potential recovery in revenue recognition in the coming fiscal year. The company expressed confidence in its guidance of ₹4,000 crore of cumulative turnover across FY27 and FY28. Strategic acquisitions during the year, including TISA Aerospace, Applied Research International Private Limited, and Anawave Systems & Solutions Private Limited, strengthened its position in loitering munitions, naval simulation, and autonomous aerial systems.

What the Numbers Show

A notable divergence exists between the decline in top-line revenue and the stability of operational margins. Despite a significant drop in revenue from operations, the operational EBITDA margin held steady at 35.95%. This resilience suggests that the mix of orders executed in FY26 may have been more profitable or that cost controls were effective despite lower volume. Furthermore, the substantial cash reserve of ₹1,308 crore relative to the annual revenue provides a robust buffer for future acquisitions and R&D investments, which totaled ₹45.44 crore in FY26. The shift in revenue timing rather than a loss of demand indicates that the slowdown is cyclical, linked to procurement cycles, rather than structural.