Good day and warm welcome to Zen Technologies Limited, Q2 FY 2026 earnings conference call. Please note, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the management's opening remarks. I would like to remind you all that everything said in this call that reflects any outlook for the future, which can be construed as a forward-looking statement, must be viewed in conjunction with the risk and uncertainty that the company faces. Please note that this conference is being recorded. I now hand over the conference to Ms. Teena Veermani from Motilal Oswal. Thank you and over to you. Thank you. Good afternoon, everyone, and thank you for joining us for the Q2 FY 2026 earnings conference call of Zen Technologies Limited. We are pleased to welcome the management team of Zen Technologies Limited to this call: Mr. Ashok Atluri, Chairman and Managing Director; Mr. Afzal Malkani, CFO; and Ms. Abhilasha Atluri, Investor Relations Head. We will start the call with a brief overview about the company's performance, after which we will open the floor for questions and answers. With that, I now hand over the call to Mr. Ashok Atluri for his opening remarks. Over to you, sir. Fellow shareholders and potential investors and friends, thank you for coming on the call. As you see, the Q2 results have come out, and one of the main expectations during the Q2 was, in addition to results, which were not as encouraging as I would want it to be, the order book position didn't build up as we had sought out. As explained in the press release, this delay in orders has been attributable to the government's extreme focus on emergency procurement post-Operation Sindhur, and part of that was good news because in that we had our anti-drone systems also, but the regular procurement of training and equipment and simulators were delayed. I want to assure you that this is just a question of when, not a question of if. Things are moving in the right direction, and we expect the orders to come soon. Having said that, I would request Afzal Malkani to brief you on the financials, key points in that, and then we can actually dig deep into the Q&A and try to answer your questions. Yeah, thank you, sir. Good evening, everyone, and we welcome you to our earnings conference call for Q2 FY 2026 and H1 FY 2026. Let's begin with a quick update on standalone performance for Q2 FY 2026. Our revenue from operations was INR 124.65 crores compared to INR 241.69 crores in Q2 FY 2025. However, in Q2 FY 2026, this is much better than Q1 FY 2026. Our operational EBITDA for Q2 FY 2026 decreased to INR 42.10 crores compared to INR 79.69 crores in Q2 FY 2025. In percentage terms, operational EBITDA is 34% of the revenue compared to 33% in Q2 FY 2025. Our total EBITDA is INR 64.79 crores compared to INR 87.84 crores in Q2 FY 2025. In percentage terms, EBITDA is 52% of the revenue compared to 36% in the last year. Our profit after tax has decreased to INR 46.16 crores in Q2 FY 2026 compared to INR 65.24 crores in the same period last year. The profit after tax in percentage terms is 37% compared to 27% in Q2 FY 2025. Coming on to the half-yearly performance for H1 FY 2026, our revenue for H1 FY 2026 is INR 235.71 crores compared to INR 495.64 crores in H1 FY 2025. Our operational EBITDA for H1 FY 2026 decreased to INR 81.27 crores compared to INR 183.73 crores in H1 FY 2025. Operational EBITDA in percentage terms is 34% compared to 37% in H1 FY 2025. Our total EBITDA for H1 FY 2026 is INR 122.72 crores compared to INR 194.08 crores in H1 FY 2025. In percentage terms, it is 52% compared to 39% in H1 FY 2025. Now, coming on to the profit after tax, our profit after tax has reduced to INR 83.28 crores compared to INR 139.42 crores in H1 FY 2025. In percentage terms, it is 35% compared to 28% in H1 FY 2025. Now, coming on to the consolidated financials, total consolidated revenue for Q2 FY 2026 is around INR 173.57 crores compared to INR 241.84 crores in Q2 FY 2025. There is a degrowth of 28% on a consolidated basis. Our consolidated operational EBITDA for Q2 FY 2026 has decreased to INR 65.54 crores compared to INR 80.31 crores in Q2 FY 2025. The operational EBITDA on a consolidated basis is 38% compared to 33% in Q2 FY 2025. Consolidated EBITDA for Q2 FY 2026, total EBITDA is INR 90.05 crores compared to INR 88.48 crores in Q2 FY 2025. The consolidated EBITDA in percentage terms is 52% compared to 37% in Q2 FY 2025. Consolidated profit after tax, after adjusting non-controlling interest, has decreased to INR 59.40 crores compared to INR 62.67 crores in Q2 FY 2025. In percentage terms, it is 34% compared to 26% in Q2 FY 2025. Coming on to the consolidated half-yearly performance for the H1 FY 2026, our consolidated revenue is INR 331.79 crores compared to INR 496.46 crores in H1 FY 2025. Our consolidated operational EBITDA for the H1 FY 2026 is INR 131.47 crores compared to INR 192.53 crores in H1 FY 2025. In percentage terms, it is 40% of the revenue compared to 39% in H1 FY 2025. Our total consolidated EBITDA for H1 FY 2026 is INR 176.55 crores compared to INR 202 crores in H1 FY 2025. In percentage terms, it is 53% of the revenue compared to 41% in H1 FY 2025. Coming on to the profit after tax for the H1 FY 2026, after deducting non-controlling interest, reduced to INR 107.15 crores compared to INR 139.48 crores. In percentage terms, it is 32% compared to 28% in H1 FY 2025. Now, moving on to the balance sheet part, Zen remains focused on maintaining strong liquidity and leveraging its asset-light business model. Our net cash position as of 30th September 2025 is INR 1,103 crores, and we continue to debt-free status. With that, we conclude our opening remarks and would now like to open the floor for questions and answers. Thank you. 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 moment until the question queue assembles. We have Manish Gupta, who would be asking his question. Manish Gupta of Equinox Investment Advisors. Manish Gupta, please unmute your microphone and you can go ahead with your question, please. Mr. Manish Gupta, please unmute your microphone. Sir, am I audible? Yes, please go ahead. Sir, thank you for the opportunity. Sir, as per media reports, Iranian Shahid-136 drones, which cost about only $35,000 - $40,000 each, are being seen as a game changer in UAV warfare. Zen has already always been at the forefront of technology and cost effectiveness. Does this low-priced and highly effective drone undermine drone and anti-drone companies globally, including Zen, sir? Yes, you know, great question. The thing what we do is we don't, we are not doing drones at this point in time. We are focusing exceptionally on anti-drone systems. Anti-drone systems, I think there are no cheaper versions than, you know, what we have been supplying, are very cost-competitive globally. We have not seen any country, including China, making anything as competent and as cost-effective as we have made. There is no competition with respect to our anti-drone system globally. To your point about, you know, what is our answer to those drones, I think that's something the drone companies are working on. Zen has acquired Vector Techniques that are trying to make something better than the Shahed kind of drones, which are really cheap. The cost to neutralize them is very, very high. Anti-drone systems, which are basically soft kill, like the ones we have, are very effective solutions and can block those kinds of drones effectively. When you look at the cost for, you know, bringing down these kinds of drones, as long as it is not a hard kill, it's just a soft kill blocking, jamming the signal which is being sent from the ground station to the drone, that's almost negligible. There's no cost involved. Only when we try to shoot it down, you know, by sending multiple missiles or very expensive solutions, then it becomes very expensive. That's not the case. That's not what we are doing with Zen's capability. We are doing a hard kill, but it's integrated with L70 and other weapon systems that we have. They are not as expensive as one would, you know, not very expensive. They are also very effective solutions. All right, sir. Just a follow-up, sir. In your opinion, these drones are amenable to soft-kill or they require only hard-kill, sir? No, it depends. If the weapon systems are, if the ground control, what happens is most of the drones work in both the categories. One is through the ground control, they work, and at some point in time, they can become autonomous based on maybe a GPS system or maybe some kind of AI-based waypoint, where they see the physical characteristics and keep going. If it is a soft ground control thing, then the soft-kill works. Where the drones become independent, autonomous, either we have to do GPS spoofing to mislead them of a geographical location, or the second option is actually shoot them down. It will depend on, to your question, the drones may work in hybrid mode, both ground control and autonomous modes. All right, sir. My second question is that you've always encouraged investors to stay put in Zen Technologies Limited for the long term and not look at short-term aberrations, particularly due to the peculiarities of the defense industry, the lumpiness of the orders, and other stuff. In your opinion, sir, has anything fundamentally changed which makes you worried about the long-term prospects of the Indian defense industry, including Zen Technologies Limited? No, not at all. I think in the long term, the story is intact, you know, and I've been, you know, I personally believe that we have, you know, it's after the dot-com bust happened in 2000, the really serious deep tech companies actually emerged, the Googles and all that. I think that's what is happening now. Companies with indigenous R&D, their own R&D, with a long-term game plan, a lot of products in the pipeline, they are the companies that are going to survive this thing for the long term. Typically, again, we are prime contractors. While there is a downside to being a prime contractor, the prime contractors for which one of the customers is the Indian Armed Forces, the Indian government is pushing us to go and sell to friendly Allied Nations. We have multiple customers and we are de-risking ourselves that way. To your question, has it fundamentally changed? I think the change is this, that the government is looking not for me-too guys or people who are just reselling other technology or just setting up a Make in India label manufacturing for becoming a manufacturing coolie for some high-end foreign technology developer, but actually developing in-house technology for India, complete IP ownership. They are looking, I think, for them, the story is improving now. The government is saying that we want Indian IP because they're really worried about what will happen if the software inside has a malware. We have seen, again, as I had said earlier, even the pager incident with the Hezbollah, whether awakening call in the sense you could even program them to be, you know, destructive. Whatever we are getting from outside is a question mark. How do you know that it will not turn against India at some point in time? It doesn't matter which country it is. Any country may be having a malware where they turn on the switch and all of our software will go. The Indian government is very, very aware of that and they are insisting that the software be ours and, you know, we should be able to read it, compile it in front of us. All the electronic designs, mechanical designs should be our own. I think that is good news for companies like Zen, which believe in this IP ownership and our own R&D. I think fundamentally it has changed in a way which is very positive for companies like Zen. Thank you, sir. Thank you, sir. I'll join back in the queue. Thank you. Thank you. We have our next question coming in from Pratish Urumkar of ICICI Securities. Please unmute your microphone. Hello. Please go ahead. Hi, this is Vikas Singh from ICICI Securities. Sir, I just wanted to understand our cumulative revenue guidance of INR 6,000 crore, given the first half had been pretty weak. How should we look at this INR 6,000 crore cumulative revenue guidance? Should we think that it will spill over to FY 2029, given our order is also pretty low as compared to our historical rate? Pratish, our feeling is that, based on the order pipeline that we have, the orders will start accelerating in H2, especially towards the end. In 2027, also, the acceleration will continue. There will be a lot of orders that will keep coming. What we are saying is cumulatively these orders will be executed in 2027 and 2028 at this point in time. I don't think that, as of now, our feeling is that all the INR 6,000 crore, whatever, INR 6,000 minus whatever we execute during FY 2026, will be executed in FY 2027 and 2028, assuming the order book will be in place as we are assuming. I think the chance of this INR 6,000 crore going to FY 2029 isn't there as of now. I feel personally very confident that 2027 and 2028 are going to be great years for Zen Technologies Limited. Noted, sir. Sir, last year had been a year of acquisition for you. Given those four verticals which you have acquired, how should we look at your total addressable market right now? Because since we are looking at this INR 6,000 crore cumulative, how much do you think that those four divisions would contribute in this cumulative INR 6,000 crore? The four companies that we have acquired, the thing is that Zen Technologies' acquisition strategy has been very, very clear in the sense that first we are saying that we should become strong in training and simulation. One of the acquisitions in that regard was ARI Simulation for the naval simulation. It is a very, very, almost even though it is inorganic, but organic in terms of strategy. We are also looking at air simulators. We are trying to build our own air force simulators, but we are also looking at some interesting acquisitions in that regard. This is the training and simulation. The second was in the area of anti-drone systems. In anti-drone systems, we are already doing soft-kill kind of a thing. Now, how do we add the hard-kill portion of that? AI Turing made the remote control weapon stations and they were able to integrate weapons and they were tested in the, by the way, they are trusted in the recent trials. I think we were the only one point, one stop shop solution for the complete hard-kill requirement. The end user really appreciated what we have offered. It's not like we are getting a ragtag of five, six items and trying to put it together and try to offer a very, very integrated and very intuitive solution we have given. Again, we are looking at the vector. We are also trying to understand the ecosystem of the drones. In that regard, we have invested in Vector Techniques and TESA is another thing that has acquired. When you look at the robotics, for robotics, we have invested in Bhairava Robotics, which is again a very integral part of the, what would I say, automated weapon system, the RCWS kind of a system. You see these, these are not verticals, but they are actually very, very accurate in nature to our strategy. I think these acquisitions, when we are talking about the INR 6,000 crore, we are adding all whatever we are, solution we are offering, the incremental solutions being offered by these companies are included in that, subsumed in that. Noted, sir. Sir, just one thing. We have talked a lot on the anti-drone systems, soft-kill and hard-kill, but as we know that this space is also getting crowded. What is the differentiator for you? One thing is the software, the hardware, everything is indigenous. What we are developing is completely IP-owned by us. We have seen in 2023, when tenders were issued under the IDDM framework, it is very difficult for any other Indian company to qualify. They are getting it from outside and they are trying to collaborate with partners and try to pass it. The first thing is that the IP ownership is ours. Second is the amount of the coverage that we give. Most of the guys were giving coverage of commercial frequency drones. When they say commercial frequency, typically, they are 2.4 MHz, 2.5 MHz, 5.8 MHz, 900 MHz, etc. These are commercial frequencies in which the DJI, all these Chinese drones, third-rate Chinese drones fly. Those were being stopped earlier by everybody, including Zen Technologies Limited. When the war started, when the actual requirement came, we realized that they will not be flying in commercial frequencies. They will be flying in any frequency in between. That is where, when we started doing wideband anti-drone systems, we were the only people who qualified in that. In 2023, when this was done, 2024, 2025, it was supplied. We were the only guys who were able to do it. Even now, if IDDM requirement, the IP requirement is there, there is no way we feel that any company can do it because we have done research for three to four years, very, very heavy research in this. It is very important that the IP in this company should be owned by India. We cannot have anybody else owning it because at the time of war, the software may fail. May means will, the Murphy's Law comes into operation in wars. We have to ensure that these are completely India-owned. The third point was that we are giving a complete solution. It was hard-kill. A lot of people are saying, but where are they getting the remote control weapon station from? Where are they getting the weapons from? All these are question marks, actually, but we are, as one company, as one group, Zen Technologies Limited and their subsidiaries are giving one integrated, comprehensive, non-negotiable solution. I think that is what is the standing. Again, you are right in the sense there are a lot of claimants at this point in time. You know, because there is too much decentralization happening in the armed forces, there may be some orders that others are picking up. In terms of quality and the comprehensiveness of the solution, Zen is way ahead of the competition. We think that if it is the IDDM, where the government actually verifies the software, the electronics, and the mechanical hardware, they'll find, they will immediately know that Zen is the only serious player in this segment. Thank you, sir. We will now move to our next participant, Akshay Patel of AK Investment. Please unmute your microphone, sir. Okay. Hello, sir. My first question is regarding government procurement. As you said, the government is on the fast-track procurement of defense equipment, and our anti-drone system is one of them. Why are we not getting orders since Operation Sindhur, since after Operation Sindhur, and earlier we had talked about INR 650 crore of order flow in the first half that is getting delayed. Can we expect this in the second half of FY 2026? Yeah, so, you know, the thing we are very positive, Akshay, that these orders will come through. Again, it's a matter of time and not whether we'll get it or not. Those INR 650 crores that we talked about were related to simulators and training equipment. That has got pushed because of the government's focus post-Operation Sindhur on operational equipment. That will come through. We are very sure. We were actually very sure that it would come by September 30. We were very wrong about the slowness with which things would happen. Now, they'll definitely come in next year. There's no doubt about that. To your second question, why no orders with respect to even anti-drone systems? The thing is the anti-drone system tenders have just been floated. As we speak, this is almost a week in terms of government time. This thing happened. They started doing it in June, July, August. Now we are in September. It's three or four months after Operation Sindhur. We think that in the next couple of months, some of the results will come through and you'll probably hear good news. If the government sticks to its own proposed timeline and this emergency procurement, typically, even the delivery has to happen within 12 months or so. I think we are waiting for the evaluations to be over, RFPs to be floated, evaluations to be open, and orders to be placed. They should happen in the next couple of months is what our expectation is. Okay, sir. My second question is, what is the total addressable market for simulators and anti-drone systems, particularly in India? My follow-up question on that would be, when do you expect these segments, both these segments to get stagnant? That's when all the area will be covered by anti-drone systems or all the simulation has been closed. When do we expect this segment to be stagnant and Zen's growth will be flattish over the how many years? I think next four to five years, the growth will continue, Akshay. You know, there are two things. One is for the simulator market, simulators will be required. They'll have a typical life cycle of 10 years. After 10 years, they need to buy again. As we grow and keep supplying the simulators, I think the growth will keep happening. Those old simulators will require to be refurnished, so there is a recycling of the market that is happening. Second is the anti-drone system. Again, they also have a very limited life cycle of 10 years. Not only that, in addition to having a limited life cycle, the threat is evolving in almost every year. When we started, everybody was saying that we want a soft kill. We don't want a hard kill, they would say. They said they're not worried about hard kill, only soft kill. We made the soft kill system. Then they said, listen, we want a soft kill, but now we also want autonomous. There are autonomous drones. When the ground control to drone, there is a communication link. We break it through jamming. The adversary came out with something called an autonomous. I will not use the ground control. After it reaches the enemy desTeenation, we will move into GPS. The drone will go through GPS and no ground control will be there. The jamming will not work. We had to come up with something called as GPS spoofing. We did the GPS spoofing. Now they are coming up with something called as autonomous, just not even GPS. They look at the waypoints, AI vision-based drones. Now we have to do nothing but shoot them down. Our systems are evolving. We think this cat and mouse game will come. They'll try to overcome us and we'll try to overcome what they have overcome. This thing will keep going on and the systems will be required every three years upgradation will be required, almost like our PC or laptops. I think this is going to be a continuous market for us. Thank you, sir. We have our next question coming in from Balas ubramanian A. of Arihant Capital. Please go ahead with your question. Good evening, sir. Thank you so much for the opportunity. Sir, my first question, you talked about AI in this, we are transforming through AI. Beyond using LLMs in simulators, what specific proprietary AI models you are developing for core products like anti-drone systems, especially for threat classifications or loitering munitions? It's like for autonomous targeting. How much of the increased R&D spend in H1, nearly INR 12.3 crore, allocated specifically to these AI initiatives? Yeah, I think AI has become a real obsession within the company. When we look at AI, there are two types of AI we are talking about. One is within the company, how do you implement AI across processes where you are buying or when you are trying procurement, R&D, the operations, after-sales service, the CSD. All this value chain, how do you apply the process so that things become faster and the bottlenecks are resolved? That is the process-based AI that we do. The second that you are alluding to is the product-based AI, where the products, we put AI into the product. For example, take simulators. When we're looking at simulators, the best way to train somebody in AI in simulators is one-on-one, which we would say is the best kind of training. How do we build that one-on-one training with the AI experts being into the development of the system, integrated into the system? I think that is what we are trying to achieve. We will be able to do one-on-one expert. There is some noise, Bala, from your side. Can you mute yourself? Yeah. Unless the AI is integrated into the product. Once AI is integrated, what happens is, what is the best kind of training? This is one-on-one training where an expert coaches a trainee. That is the best kind of training. The second thing is how do we ensure that AI is that kind of a coach. If there are 100 people, it will detect what is each guy's weakness, and it will be able to coach the guy as an expert. Similarly, in anti-drone systems, also threat classification, everything, the AI is being integrated in a large way. We are actually eating, drinking, breathing AI at this point in time. We are at a very, very basic level. The AI is completely integrated. Yeah. Sorry, Bala, please go ahead with your next question. Yes, sir. My second question for that equipment order book, nearly INR 346 crore, the major execution is happening in Q3 only. Are we expecting any further significant new orders, especially for new anti-drone systems? What is our current production capacities? We have adequate, again, remember, Bala, we don't do most of our production in-house. We have a value chain that addresses the production issues. We have enough bandwidth within the supply chain to execute the order. We don't think there is any constraint there. With respect to the order book, yes, I think in H2 we will be executing a considerable part of the order book that we have. We see some more accreditations also happening. Whatever accreditations are happening, we will try to execute them also. I think that way H2 will also be, I think it will not be as good as last year, but it will be muted. The whole year will be muted. Again, we think that 2027, 2028 will more than make up for the deficiency in the current year. Thank you, sir. We have our next question coming in from Bhawna Singh of Yes Securities. Please go ahead with your question. Yeah, thank you so much for taking my question. First is, sir, obviously, I would like to understand with the muted macro environment that we're sitting on with the product mix that we have. What is the expectation in terms of a product mix kind of an outlook, maybe for a mix between simulators and anti-drone systems or with the new acquisitions that we've done? Is it that we're trying to pivot in terms of a product mix segment? You did mention earlier in the call that an INR 650 crore simulator order was expected, which is obviously pushed to sometime, you know, for the next quarter or so. One is obviously trying to understand on the product mix for this year that we should look at, probably, you know, the guidance that you've given out for INR 6,000 crore of a top line, say, in the next two years or so. What would lead the contribution or which product would lead the contribution over there? Thanks, Bhawna. In terms of product mix, we are looking only between simulators and anti-drone systems. The simulators would be across three services, and anti-drone systems, again, Indian and foreign, so India and exports, Indian Armed Forces and friendly Allied Nations. Simulators also similarly serve domestic and international markets. To your question, out of the INR 6,000 crores, what would be the breakup between simulators and anti-drone systems? I will make a very wild guess, and I may be off the mark. Typically, we are thinking 40/60, but now we have started thinking maybe it is 50/50. It is an evolving situation, but the pipeline for the anti-drone systems has become very strong post-Operation Sindhur. I think that's going to lead the demand for the product that we have. With respect to whether we are going to pivot to something else because of the acquisitions or not, they are very focused acquisitions. Very frankly, the first 25 years of our existence, we were just focused on one line. That was training simulators for the Army, not even for the Navy or Air Force. We were just doing that. After that, we added the second line, which was anti-drone systems, and that's been eight years. We are not really, we are trying to consolidate. What we feel is that whenever you are in a field in which you have some lead and some kind of a leadership position, and there is a lot of market still left untapped, don't try to make yourself thinly spread over many avenues. We really want to go deep into these things, simulation and anti-drone systems. We don't want to pivot unless there is a very good acquisition that has deep capabilities and can help us have a leadership plan to become a global number one or number two in the next three to five years. We don't want to really pivot. To your answer, the short answer is that we will go deeper into what we have because these markets have a lot of potential. As somebody was asking about the addressable market, we think a couple of billion dollars in both the cases at the minimum are there, markets are there. We want to exploit those markets rather than go across to something else. Just to follow up on that, you know, obviously, as you mentioned, if you probably can give a little bit of overview on what is the mix that you're probably looking to have, even on the geographic side of it, be it domestic or exports. Earlier on the call, I think sometime last quarter, you did mention that H2 probably will pivot more towards export-oriented segments. Just like to probably understand on how you are placed for the year in terms of the order pipeline and, you know, for the next year on that front. In terms of geographic focus, we have Africa as one region that we really focus on. We are looking at the Middle East and CIS countries. Now, with our acquisition of ARI, they have a very strong presence in Southeast Asia. We are leveraging their connections there, and they have an office in Singapore. We are trying to leverage that to actually get entry into those markets. We think that the efforts in H2 are being accelerated. We do hope that between H2 and H1 of next year, there will be some very nice, pleasant surprises in the exports market, and we'll get a lot of revenues in that regard. We think simulators are a big part of the exports demand that we are getting, but also anti-drone systems. We see a lot of inquiries coming. This will be a mix of both the anti-drone systems and simulators, which will be leading our efforts into exports, I think. Thank you. Thank you, sir. We have our next question coming in from Rupesh Dhatia of Long Equity Partners. Please go ahead with your question. Yeah, hello sir. Am I audible? Yes, sir. Thank you. Thank you for the opportunity. Just following up on the previous participant's question. You said 50/50, INR 6,000 crore order book. Rough guess is 50/50. Is it fair to say that the competitive landscape in simulators is very favorable, but the competitive landscape in drone systems may worsen? The margin profile will be significantly different. Any qualitative or quantitative comment if you can provide around the margins of the two segments? I think, just to explain to you, how do we, the value capture, where does the value capture come? Where do the margins come from is deep R&D. If you have actually done a tremendous amount of R&D in a product and you are able to offer features and you are able to offer them at a price which is the best in the world to the customer, I think the customer is willing to pay. What we are saying is these margins that we have are in competition with the similar kind of systems that are being done. Now, how much they have spent on R&D, typically their cost of actually achieving this system is much, much higher than what we are able to, and we operate very efficiently. R&D is very efficient. Our productions are very efficient. All of these also add up to the savings that are there, which are not possible with two other companies. For example, we know one very large company that has got about six vendors together to offer an offering that we were given. It is a broken system that they are offering. The fact is everybody is adding their margins. Finally, by the time they come and actually compete with us, they will not be able to become cost-competitive to us. Even if they are trying to match us, they won't have any margins. These margins are because we have created deep R&D and in-house R&D. I think that is why we are able to think. To your question, the answer is that these margins are sustainable. At least in the next couple of years, we don't see any threat of margins being compromised. We will let the market speak in the next two and three years and let us see how, you are right in the sense that if they become very aggressive, we will also become very aggressive and try to compete with them. As of now, we see no threat to the margins that we are having. Okay. And sir, I mean, counter drone system tailwinds, I think I understand. I think most of us understand based on what is happening around the world. What are, you know, like two, three things that are driving this big order inflow in the simulator segment? I don't think we have ever seen such large quantum of orders in simulators. What is driving this? Rupesh, what has changed is this: five years back, the wars were not happening at all. I mean, there were no wars. People were not, you know, before Armenia, Azerbaijan, nobody was even thinking about war. Somebody said, you know, what happens if we have war? They didn't want to prepare for war. Armenia, Azerbaijan happened. Russia, Ukraine happened. Now, everybody is itching to go for a war. Somebody was saying there are 17 or 18 skirmishes or wars, battles going on in the world. Who would have imagined Thailand and Cambodia fighting? The thing is now war is no longer looking like a distant fantasy, but it is knocking right at the door of every nation. For that, they need to prepare. They need to be really trained efficiently in a shorter time and in a continuous manner. Preparation for war is no longer an option, but an absolute necessity for every nation at this point in time. This shift of war is happening, potential threats, somebody coming and attacking them is very real. That's why we see the simulator tailwinds in the case, as you said, for anti-drone systems. They are also there for training and simulation equipment. Thank you, sir. We have our next question coming in from Dipen Vakil of Philip Capital. Please go ahead with your question. Hi, sir. Sir, challenging times, but EBITDA margin resilience has been something which is positive. Sir, my first question is, sir, in this quarter, out of INR 94 crore worth of new auto bins, almost INR 90 crore have been from your subsidiaries. Can you tell us about which subsidiaries are contributing to such auto bins and the kind of execution that we can expect from subsidiaries also going forward and the kind of split that is there in the order book right now? INR 675 crore between, say, equipment to AMC and subsidiaries. Yeah, I think I'll let Mr. Afzal Malkani handle it. If you see, Dipen, total order book position is on a consolidated basis. It is under INR 675 crore, out of which INR 375 crore is equipment and remaining is for the AMC. Out of this INR 675 crore order book, INR 484 crore is Zen. UTS is around INR 98 crore. ARI is around INR 92 crore. Vector is around INR 1 crore. Total subsidiaries is INR 190 crore. Got it, sir. Recently, there was some news flow around, basically an RFP for something like your Brahasta product. Any progress or any RFP that has come out for your product on that front? Yeah, we have some RFPs that have come up. Again, for various reasons, we cannot really get into that, but they are largely anti-drone system tenders that have come out. They are actually kind of going to increase in size, and the size is pretty big. Not now, but in 2027, they think the size of the orders are going to be very, very big. We expect that the demand, especially in the anti-drone segment, is going to be huge. Simulators also, they are going to be huge. To your question, yes, there are some new tenders that have come up. Thank you, sir. We'll take our next question from Akshay Joganimore of Xponent Tribe. Please go ahead with your question. Sir, am I audible? Yes. Perfect. Thank you. Thank you for the opportunity. I have a few questions on the drone side. Sir, a few days ago, you gave a press release of getting a contract for a hard-kill system. Can you just give some color on sort of what exactly in terms of is it a full system and what are the specs of that particular hard-kill system that we are supplying? I'll not go much into details, but typically, the system consists of detector, jammer, radar, electronic optic, which is a camera, and then a hard-kill weapon, that remote control weapon station, and the actual weapon which is required. All this put together makes up the system. We are able to supply, we were able to win the thing. Again, this was a typically single vendor situation, resultant single vendor situation. Nobody else could even come up with an offer to the government. This is what the configuration was. Sure. Is this for one system or multiple systems? This was one system or multiple? Please come again. Is this one system, like this is connected to one L70 gun, or is it like multiple? It was not L70. It was some other weapon. Yeah, it's not. This is one system. Yeah, you know, I'm not sure about it. Maybe it must be two systems or something like that. I'm not sure about the quantity. The reasons that I'm asking is I sort of want to extrapolate to get a sense of how, I mean, because we have a bunch of air defense guns, right? We, the conversations are to retrofit these systems to the air defense guns as a hard-kill system, right? The objective of asking this is if we have a thousand guns that you have to attach, is it for one, two, or multiple? Is sort of what? Yeah, you know, we have already integrated our system with the L70. It has been proven. It has actually on trials to shoot down, shot down, and it's been used at many places. The ability to integrate with the air defense guns is proven in the case of Zen simulators. For you to say, listen, these many guns are there. If all get integrated, what is the size of the market pertaining to air defense guns for Zen simulators, Zen anti-drone systems? I think that it's a little difficult exercise to do. One thing we know is that we are, you know, L70, Zen is the only company that has the mainstay of air defense. Zen is the only company that is integrated and demonstrated to the armed forces. Yeah. Thank you, sir. We'll take our next question from Harshit Kapadia of Elara Capital. Please unmute your microphone. Yeah, hi. Am I audible? I know it's a tough time, sir, but I think margins remain to be healthy and we think the order book should see some ramp-up going forward. In relation to that, I just wanted to check with you, sir. We were expecting the simulator order for INR 600 or INR 650 crore. Now, considering what you understand, do you think it will happen in Q3 or Q4? What could be your best guess? Could there be a slippage going to FY 2027? No, I think the orders will definitely come in H2. We are very confident about that. There were not only these orders, there are some other orders that have to come through. We see that the government is now, again, because of this emergency procurement push, we are not able to really comment by when they will get the order. We think it will be sooner than later. Given the experience of H2, our confidence level, we are kind of a little reticent to actually give it with so much confidence. I think orders are on track and we should be getting them sooner than later, probably. Definitely in H2. There's no question of it spilling out to 2027. Great to know this. Sir, you mentioned about emergency procurement. Any clarity by when do you expect the emergency procurement orders or any announcement to happen? Has it also started? What could be the size of order that Zen could get within the emergency procurement? Any tentative idea would be of great help. One thing is each size, each order should be less than INR 300 crore because this emergency procurement, the size is typically limited to less than INR 300 crore. Especially if it is within the IFA's power, which is the Vice Chief in this case. The second one is with respect to by when the orders will be concluded. I think they have to be concluded before March 2026 unless there is an extension given to the EP. It may happen even earlier in some of the cases, but not later than March 2026. Thank you so much, sir. Our next question is coming in from Shrenik Mehta of IndoAlps Wealth. Please go ahead with your question. Hi, can you hear me? Yes. My question was about the ADA's orders that you received and also some media reports which were showing that a large part of these orders are going more to the defense companies like BEL and DRDO compared to the private companies like Zen. We get orders probably for faster deployment areas and the BEL and the DRDOs are probably getting orders for the bigger deployments which are not very time-critical. Do you have some comments which reflect on what's really happening here? Anti-drone systems, I think we are in a very good position. Any end user who's very serious about protecting the border or whatever it is, if they really dig deep, there is only one company that can actually deliver a very serious system. That is Zen Technologies. With respect to, you know, BEL, typically the orders are placed on BEL because DRDO is the R&D organization. Very rarely orders are placed on DRDO except for maybe trial or something. BEL would be the, when they get it, I don't think they're getting anything in this area, but they're getting a lot of other orders. One of the benefits of being a public sector is that you get direct orders from the government. That's a plus point that they have, which we don't have because even though under IDDM we get single vendor benefits, most of the time we will never be nominated. An anti-drone system, again, I think we are by far the best solution available in India and most of the other places. That is the answer. Please go ahead with your next question. We are looking a little worried about, you know, the scale up to INR 6,000 crore in three years' time. This will really mean that from something like INR 100 crore order in a quarter, we will have to scale next year to maybe INR 500 crore in a quarter and then going forward to INR 750 crore in a quarter. That kind of scale-up looks very difficult if you look at what has happened in the last three or four quarters. Is Is it more like a hope that we will get to the INR 6,000 crore by FY 2028 cumulatively, or do you feel that there is a very strong reality that it could happen? There are two things, Shrenik. One is, you know, will we get the order book or will the order book scale up to that? The second is, will you be able to execute the orders? I think the first is, given the pipeline that we have, the order pipeline is very, very strong and we should be able to get it. The second is, as we speak, we are scaling ourselves to execute these large orders that you are saying, exactly. It's INR 500 crore and INR 750 crore per quarter. That's a very, very strong order. Given the fact that we have done INR 250 crore, INR 300 crore, let us not take this as an exception, but we have done INR 250 crore, INR 300 crore. Will we be able to scale to INR 500 crore? I think that's easy. INR 750 crore will require some changes, but we are hopeful that we will be able to achieve that. Thank you so much, sir. We will take our last question for the day from Abhijeet Singh of Systematix. Please go ahead with your question. Mr. Abhijit Singh, please unmute your microphone. Am I audible now? Your voice is too low, Mr. Singh. Yeah. My question is, like in drones, we have capabilities that we can define in terms of altitude, endurance, payload, etc. Similarly, in terms of counter drones, sir, is there any objective capability that we can define in general to understand the competitive landscape that we are operating in, both in the domestic market as well as exports? Right now, what I understand is that we are working on solutions which will counter the capabilities of our main adversary. If we talk about the global landscape going forward, what are the capabilities that we are looking at, you know, adding to our portfolio to be able to compete? In the anti-drone segment, Abhijit, we look at distance, how far can you detect it and how can you disable the incoming drones? What are the different ways you can do? Can you do jamming? Can you do spoofing? Can you do actual hard kill? Can you shoot them down? These are the different characteristics that are there. There are also what kind of frequency ranges you can do. Initially it was just commercial drones. Then it became from 400 MHz to 6 GHz. Now, when I went to the DSEI, we know that our adversaries are procuring drones in the 100 MHz, 200 MHz categories. Those drones are not detectable by the previous anti-drone systems. How do we make our anti-drone systems that are capable of detecting drones from 100 MHz all the way to 12 GHz? That's the kind of drones that are being purchased by our adversaries. These are the capabilities that the, will we be able to jam them and bring them down? Those are number one. That is the thing that we are looking at. Globally, when we are looking at what we think is that the game is changing now in the sense that the detection capabilities will be vastly different at some point in time. For example, we are talking about incoming drone at a height of 10,000 or 20,000 feet. What happens if a mothership, which is very large and flies at 45,000, 50,000 feet, comes just above us and then leaves a lot of drones down? How do we handle those kinds of drones? These kinds of threats are emerging. Companies like Zen Technologies Limited are really, really preoccupied with how to solve these issues. That is one of the reasons I'm saying that if you, as a country, you will have to buy it from Indian companies because that is the only way that you will be able to upgrade when the problem comes. If you were to buy something from a foreign company and you go to them and say, listen, this is not working, the new threat has emerged, will you upgrade me? They are saying to us, sorry, you have to buy a new system or they may just refuse to upgrade if there is a war going on. This is a capability that the Indian government and should really, really focus on trying to get it solved with indigenous technologies. Right, sir. Sir, just the last question. In line with the first question, are we looking to partner with some global company or a technology provider in order to scale up to these higher frequencies and adding up more capabilities? Is there a plan in that sense or is the plan to do a significant amount of R&D and IP in-house? The thing is, Abhijit, that these capabilities are already there. What I am talking about, the drones of 100 MHz- 12 GHz, all these capabilities are already there, which most of the companies in the world don't have. When we are looking to, if we were to partner with somebody, what are we going to partner for? We don't need the technology. Not only that, as we speak now, we are working on more futuristic technologies, which other people may not even be wondering that this is a threat which should be coming up in the future. We are working already in those technologies. To be very frank, if India needs us to partner with somebody because that technology is not available with Zen, we would be open to it. We are looking for such an opportunity where the technology that we don't have, somebody else has, and we can partner with them. As of now, we are way ahead of the game and we are still investing in more futuristic R&D. Let's hope that we as India are able to export this to our friendly nations. Again, to your question, if there is something, some capability that Zen doesn't have and the country needs, we will be willing to partner with the technology partner to deliver the solution to them. We would like to indigenize that solution rather than being their manufacturing coolie and keep manufacturing them for them. We would definitely like to partner with them because Zen is very strong technically. If some technology partner comes, we would do R&D with them to create the next version of their product, which would be much, much stronger than what they were to do by themselves. I think, yes, we are open to technical partnership as long as it's a technological partnership, not a relationship of master-slave kind of a thing where they throw the technology at us and ask us to manufacture. We don't do that thing. We will collaborate on doing R&D together. Thank you, sir. Ladies and gentlemen, that was the last question for today. I will now hand it over back to Ashok sir for the concluding remarks. Over to you, sir. Thank you, friends. Thanks for being patient and asking questions. I really appreciate Shirulda, so continue to be with Zen through thick and thin. We think that the big picture is playing out now. The version two of the growth, the way dot-com bust happened and then the actual companies came up, the version two of the defense thing is coming up. The companies that will really flourish are the companies that have the R&D, in-house R&D, not just partnering and doing a jugadu job for each tender, but actually having a long-term strategy to develop some deep capabilities in some verticals, which is what Zen is doing. I think we will be big beneficiaries of the government's focus on IDDM, indigenous IP, and we will also be significantly addressing friendly nations from India and do a good job of exports, both in simulators and anti-drone systems. Thank you so much. Thank you. On behalf of Zen Technologies Limited, that concludes today's conference call. Thank you for joining us, and you may now click the leave icon to exit the meeting. Thank you all for your participation.