DEEDEV - DEE DEVELOPMENT ENGINEERS LIMITED Share Price

The management of DEE Development Engineers Limited provided a promising outlook during the Q1 FY '26 earnings call. Mr. Krishan Lalit Bansal highlighted an operating income of INR 2,238 million, marking a 21.0% increase year-on-year, while operating EBITDA rose by 44.7% to INR 359 million, with margins expanding to 16.0%. The profit after tax (PAT) saw a staggering increase of 314.3% to INR 132 million, leading to a PAT margin of 5.8%. The order book as of July 31, 2025, stands robust at INR 12,267 million.

Key forward-looking points included:

1. Capacity Expansion: Progress at the Anjar facility is ahead of schedule, with an additional 15,000 metric tons per annum capacity expected to be commissioned by the end of August 2025. This will bring the facility's total capacity to 30,000 metric tons per annum.

2. High-wall Seamless Pipe Plant: This plant is on track to commence commercial production by January 2026, aiming to improve supply chain efficiency and competitiveness.

3. Power Sector Engagement: Management is actively participating in tender processes, securing L1 positions in significant bids, and anticipates sustained demand in the oil and gas segment.

4. Entry into Green Hydrogen: A partnership with an international clean-tech leader will focus on developing modular hydrogen production systems in India and Thailand.

5. Growth Forecast: For the full financial year 2026, management anticipates additional order inflow of approximately INR 1,200 million. Revenue guidance remains set at around INR 1,300 crores with EBITDA margins between 19-20%.

Management expressed confidence in diversifying growth through strategic initiatives while striving for operational excellence and enhanced profitability.

Q&A Section Summary from DEE Development Engineers Limited Earnings Call (August 12, 2025)

Question 1: "What order flow can we expect in the remaining 8 months, and what will be the number for whole FY '26 in terms of order inflow?"

Answer: We expect to secure around INR 1,200 crores in additional orders by March '26, on top of the INR 320 crores already obtained in the initial four months.

Question 2: "What percentage of the current order book belongs to the U.S., and how will it affect guidance for INR 1,300 crores revenue and 19-20% margins?"

Answer: Out of our current order book of INR 1,226 crores, only 2% is for the U.S. We do not foresee this affecting our FY '26 revenue or margin guidance.

Question 3: "How confident are we regarding the biomass power plant tariff resolution, and if it persists, will it impact margin guidance?"

Answer: We are hopeful for a favorable resolution within a month. If the older rates persist, our EBITDA margin guidance might reduce from 19-20% to 16-18%.

Question 4: "When should we expect large orders from the Power segment, and how long will it take to execute?"

Answer: We expect orders within the next 2-3 weeks, with execution timelines varying between 6 to 12 months depending on the units required.

Question 5: "What order levels do we anticipate for the closing order book this year?"

Answer: We project a closing order book of over INR 1,200 crores by March '26, which could reach approximately INR 1,500 crores.

Question 6: "Given current delays, where do we stand on revenue execution for the year?"

Answer: Initial impacts may result in a revenue shortfall of up to INR 50 crores due to delays, but we remain confident in achieving our targets overall.

Question 7: "What will be our annual depreciation and interest costs related to the Anjar facility after its full functional capabilities?"

Answer: Once fully operational, annual depreciation will range from INR 60 to 65 crores.

Question 8: "What impact will U.S. tariffs have on our business?"

Answer: Given our products' HSN codes, over 90% are not subject to tariffs, so we don't expect significant disruption from the new tariff policies.

Question 9: "What is the projected revenue and margin outlook for the hydrogen business?"

Answer: We see substantial potential for revenue growth in hydrogen in the coming 2-3 years, leveraging our proprietary technology, though specific numbers are not yet available.

Question 10: "What funding options are available to support increased working capital requirements given elevated revenue expectations?"

Answer: Currently, we will rely on borrowings to meet working capital needs, but we'll assess other funding opportunities as necessary in consultation with our Board.

This summary captures the essence of the questions posed during the earnings call along with concise, first-person answers provided by management.