Zen Technologies Limited · NSE:ZENTEC
Zen Technologies — Investor Presentation (September 2023)
47 slides from Zen Technologies's investor presentation, Sep 5, 2023
Slide 1: Filing cover letter to BSE and NSE
Date: September 5, 2023 To To BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, C-1, Block G, Dalal Street Bandra Kurla Complex, Mumbai- 400001 Bandra (E), Mumbai – 400 051 Through: BSE Listing Centre Through: NEAPS Security Code: 533339 Symbol/Security I
Slide 2: Investor Presentation September 2023
Investor Presentation September 2023 1
Slide 3: Zen Technologies – Solutions Offered
Zen Technologies – Solutions Offered Protection Division Description Protection Solutions Training & Designed to meet the training requirements of the mechanised forces in field craft, Simulation battle drills, tactical and gunnery procedures Live Simulation Solutions include TacSim indoor, Comb
Slide 4: Competitive Advantages – Bet on Capability to Innovate
Competitive Advantages – Bet on Capability to Innovate • IP driven advantage (High IP Content and low BOM 15-35%) • 130+ Patents filed of which 50 have been granted . • Less dependence on imports for supply chain. • 611+* Strong Human Capital • Effective Virtual demo – saving cost and time • Asset l
Slide 5: Zen Technologies – Revenue Streams
Zen Technologies – Revenue Streams Training Simulation Equipment Counter-Drone Solutions Annual Maintenance Contract Anti-drone systems are used to detect Recurring revenue stream and/or intercept hostile drones New simulator sales leading to growth Leader in Defence Training Solutions Sys
Slide 6: The Book of Five Rings – Miyamoto Musashi
The Book of Five Rings – Miyamoto Musashi 5
Slide 7: If you think training is important for Indian army
If you think training is important for Indian army, there is only one good bet in India 6
Slide 8: 30 years of singular focus on training and simulation
30 years of singular focus on training and simulation! 7
Slide 9: And…
And… 120+ total Staff dedicated to R&D Huge legacy libraries of Reusable Software, Electronics and Mechanical modules Huge Collection of Weapon replicas and their physics 30 years worth of Data being used in AI to reduce training time Extremely Leveraged R&D – Only 73 Cr spent in the last
Slide 10: Zen's Unique Value Chain Designed to Scaleup
Zen’s Unique Value Chain Designed to Scaleup R&D Engineering Manufacturing (Outsourced) – Capex Minimized On-site Installation and Training Warranty AMC (More on AMC later) 9
Slide 11: Regulatory Tailwinds
Regulatory Tailwinds 10
Slide 12: Buy Indian IDDM – 2016 DPP and 2020 DAP
Buy Indian IDDM (Late Sri Parikkar) – 2016 DPP and 2020 DAP 11
Slide 13: Recognition of the Importance of Training – Simulation Framework from MOD
Recognition of the Importance of Training – Simulation Framework from MOD 12
Slide 14: Policy
Policy https://pib.gov.in/PressReleasePage.aspx?PRID=1757253 13
Slide 15: Policy
Policy https://pib.gov.in/PressReleasePage.aspx?PRID=1757253 14
Slide 16: Agnipath Yojana
Agnipath Yojana – Effective training of Agniveers at lesser time and cost 15
Slide 17: Four 'Positive Indigenisation' lists prohibit import of products
Four 'Positive Indigenisation' lists prohibit import of 12 products developed by Zen. 16
Slide 18: Aggressive #Atmanirbharta push towards indigenisation
Aggressive #Atmanirbharta push towards indigenisation through iDEX and Make-2 17
Slide 19: Order Book of Past Years
The order book position of the simulators over the years Order Book of Past Years (In INR Crs) As on 2020 2021 2022 2023 Sept 5, 2023 Products 65.96 72.30 183.74 240.20 590.96 AMC 94.83 120.37 115.63 145.61 228.25 160.79 192.67 299.37 385.81 819.21 As on 31st March each year 18
Slide 20: Military Training Simulators: A Snapshot (Global)
Military Training Simulators: A Snapshot Global Market $ 9.2 bn $ 12.2 bn 2022 2027P Source: Industry Reports, Framework for Simulators in Armed Forces; DDP* = Department of Defence Production 19 19
Slide 21: Military Training Simulators: A Snapshot (India)
Military Training Simulators: A Snapshot Indian Market INR 15,000 Cr Estimated Indian Market Size Source: Industry Reports, Framework for Simulators in Armed Forces; DDP* = Department of Defence Production 20
Slide 22: Anti-Drone
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Slide 23: Most frictionless product – 3 decades of Zen
Most frictionless product – 3 decades of Zen 22
Slide 24: Drones herald a Tectonic Shift in Warfare
Drones herald a Tectonic Shift in Warfare – similar to swords to gun fighting 23
Slide 25: Developed Anti-Drone System with Soft-kill as well as Hard kill option
Developed Anti- Drone System with Soft-kill as well as Hard kill option 24
Slide 26: Article published on India Today
Article published on India Today 25 25
Slide 27: Article published on India Today
Article published on India Today 26
Slide 28: Anti-Drone System
AENTI-DRONE SYSTEM AIRPORTS & ——— EE or onons BASED DRONE TECTOR PUBLIC SPACES RADAR DETECTION & INFRASTRUCTURES being there... MODULE OF MULTI SENSOR SETUP INCLUDE: VIDEO BASED DRONE IDENTIFICATION & TRACKING RF Detector Antenna System DATA FUSION & COMMAND OIL & GAS INDUSTRIES VIPS’ / HOME LAND SE
Slide 29: Order Book
The order book position of the ADS over past two years Order Book (In INR Crs) As on Sept 5, 2022 2023 2023 Product 131.35 87.28 456.11 AMC ‐ ‐ ‐ 131.35 87.28 456.11 As on 31st March each year 28
Slide 30: Mindset – Infinite Game Player vs Finite Game Player
Mindset – Infinite Game Player vs Difference Between Zen Finite Game Player and Other Players: 29
Slide 31: AMC
AMC Starts after 2-3 year warranty period 30
Slide 32: AMC Current and Future
Current Future ~Rs 40 Crores By 2025 AMC would increase to ~70 Crores, as per current Order Execution Order book worth ~Rs 1,270 Crores AMCs expected to increase to ~Rs 150 Crores by 2027-28 31
Slide 33: Winning new orders on back of continuous R&D efforts
Winning new orders on back of continuous R&D efforts Order Book & New Orders AMC Order – Rs 169.98 Cr Rs 542.84 Cr Total Order Book on 30th June 2023 Equipment Order – Rs 372.86 Cr New Orders received in Q2 FY 2024 till date. Sr. No Description Month Order Size (In INR Crs) 1 Supply of Anti Drone Sy
Slide 34: Anti-Drone Industry: Key Growth Drivers
Anti-Drone Industry: Key Growth Drivers INCREASED DEMAND IN MILITARY AND NATIONAL SERVICES • Due to the asymmetric damage the drones can do, Anti-drone systems will continue to see growth in the demand. Source: Industry Reports; News Articles 33
Slide 35: Other Strategic Priorities: International Markets
Other Strategic Priorities Increasing focus on International Markets - Keen focus on export markets has resulted in brisk growth in export markets - Fast clearances from Government for exports will further act as tailwind Source: Industry Reports; News Articles 34
Slide 36: Other Strategic Priorities: Inorganic Growth
Other Strategic Priorities Expansion through Inorganic Growth - Actively evaluating potential targets for acquisition to further expand the business in adjacencies – market and product Source: Industry Reports; News Articles 35
Slide 37: Other Strategic Priorities: Sustainability
Other Strategic Priorities Sustainability - On World Environment Day, June 5 2023, collaborated with TERI* and released a report on how simulators can enhance sustainability in the armed forces. - Utilizing simulators costing Rs 15Cr for one particular type of weapon platform over a 30-year period c
Slide 38: Zen Technologies – Investment Merits
Zen Technologies – Investment Merits Focus on Simulators and Anti-drone Systems – IDDM Category Increasing Revenues from AMC – Annuity in nature Regulatory Tailwinds – Framework on Training Simulators & Agnipath Yojana Asset Light Business Model Increasing R&D Spends with emphasis on Anti-Drone Syst
Slide 39: Distinguished Board of Directors (1/2)
Distinguished Board of Directors (1/2) First generation entrepreneur & visionary founder of Zen Technologies He is a PG Diploma holder in Applied Computer Science He was awarded the title of “Small Scale Entrepreneur of the Year” by the Hyderabad Management Association in 1998 Mr Ashok Atluri
Slide 40: Distinguished Board of Directors (2/2)
Distinguished Board of Directors (2/2) Dr. R.K. Tyagi is a Ph.D (Doctorate in Management Studies) from Agra University & has completed his Engineering (Electronics & Communication) from IIT, Roorkee, MBA (Marketing) from IGNOU, New Delhi He has 46 years plus experience including 14 years of boar
Slide 41: Profit & Loss Statement (Standalone)
Strong Financial performance: Profit & Loss Statement (Standalone) Income Statement (INR mn) FY19 FY20 FY21 FY22 FY23 Q1FY24 Net Sales / Income from operations 922 1,470 496 537 1,614 1,324 Expenditure Cost of raw materials consumed 373 251 75 145 636 162 Changes in inventories of FG, WIP & SIT ‐116
Slide 42: Balance Sheet (Standalone)
Strong Financial performance: Balance Sheet (Standalone) Balance Sheet (INR mn) FY19 FY20 FY21 FY22 FY23 EQUITY & LIABILITIES Share Capital 77 77 80 80 80 Reserves & Surplus 1,333 1,910 2,052 2,837 3,112 Non Current Liabilities Long term borrowings 88 2 2 31 1 Deferred tax liabilities 14 16 17 18 23
Slide 43: Robust historical financial performance
Robust historical financial performance Revenue & Margin Profile Net Cash Position INR mn INR mn Net Cash 1,470 1,614 1,472 922 43.3% 31.8% 24.4% 41.2% 761 496 537 23.3% 342 20.9% 126 185 15.6% 3.8% 8.3% 3.7% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Revenue EBITDA Margin PAT Margin Net Cash
Slide 44: Profit & Loss Statement (Consolidated)
Strong Financial performance: Profit & Loss Statement (Consolidated) Income Statement (INR mn) FY19 FY20 FY21 FY22 FY23 Q1FY24 Net Sales / Income from operations 922 1,493 546 698 2,188 1,324 Expenditure Cost of raw materials consumed 376 264 102 246 785 162 Changes in inventories of FG, WIP & SIT ‐
Slide 45: Balance Sheet (Consolidated)
Strong Financial performance: Balance Sheet (Consolidated) Balance Sheet (INR mn) FY19 FY20 FY21 FY22 FY23 EQUITY & LIABILITIES Share Capital 77 77 80 80 80 Reserves & Surplus 1,229 1,790 1,965 1,978 3,082 Non Current Liabilities Long term borrowings 33 - 14 12 42 Deferred tax liabilities - - - - -
Slide 46: Robust historical financial performance (Consolidated)
Robust historical financial performance (Consolidated) Revenue & Margin Profile Net Cash Position INR mn INR mn Net Cash 2,188 1,674 1,493 922 42.0% 33.2% 829 39.3% 18.1% 546 698 413 22.8% 251 14.4% 6.5% 123 13.5% 5.1% 3.7% FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 Revenue EBITDA Margin PAT
Slide 47: Thank You
Thank You Disclaimer Certain Statements in this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and unce
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