DEE Development Engineers Limited — Q4 FY26 earnings call

Call held 22 May 2026

Management summary

DEE Development reported robust financial performance for Q4 and FY26, driven by strong execution and improved operating leverage in its core business. The company's order book provides significant revenue visibility, and new facilities are ramping up. Management is strategically pivoting its non-core power segment towards biomass pallets and expects a turnaround, while also guiding for continued margin expansion and working capital efficiency improvements.

Highlights

  • FY26 PAT increased 76.9% year-on-year to Rs. 77.2 Cr, reflecting strong underlying momentum.

  • Revenue from operations for FY26 stood at Rs. 1,142 Cr, up 38% year-on-year, driven by healthy execution in the piping segment.

  • Operating EBITDA for FY26 was Rs. 189.3 Cr, up 52.9% year-on-year, with EBITDA margin improving to 16.7% from 15.0% in FY25.

  • Order book stands at Rs. 2,040 Cr, providing strong multi-year revenue visibility and a healthy project pipeline.

  • Completed a significant part of the growth CAPEX cycle, including operationalization of the Anjar pipe fabrication facility and seamless pipe plant.

Concerns

  • Q4 FY26 gross margin declined, partly attributed to small portion of trading activities with high material value.

  • Working capital cycle increased due to strategic choices (reduced payable days for discounts), though management aims for 200 days in FY27.

  • Malwa Power segment had a qualified audit opinion, though management expects it to turn profitable and resolve the qualification by Q3 FY27.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹361.6 Cr
    YoY +26.3%
  • Operating EBITDA
    ₹65.9 Cr
  • PAT
    ₹27.7 Cr

FY26

  • Revenue
    ₹1,142 Cr
    YoY +38%
  • Operating EBITDA
    ₹189.3 Cr
    YoY +52.9%
  • EBITDA Margin
    16.7%
  • PAT
    ₹77.2 Cr
    YoY +76.9%

What they filed

Q1 FY27: revenue up 31.3%, net profit up 23.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue194 162 286 224 270 +39%287 +77%362 +27%294 +31%
EBITDA30 6 64 36 44 +47%48 +700%64 +0%50 +39%
Net profit22 -13 32 13 18 −18%19 +246%28 −12%16 +23%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Core Business
    ₹210.5 Cr EBITDA (FY26)64.2% EBITDA Growth (FY26)
  • Non-Core (Power & Biomass Pallet)
    ₹47.71 Cr Expected Revenue (FY27)₹5.52 Cr Retrospective Tariff Recovery

Order book

high confidence

Total value

₹2,040 Cr

as of 2026-03-31 quantified

Execution

Orders run between 6 to 18 months, with an average period of around 12 months for execution.

Composition

  • Power Sector (segment) ₹1,200 Cr 58.8%
  • Job Work (contract type) 30%
  • Alloy Steel (material type) 57.5%
The order book provides strong multi-year revenue visibility, with execution weighted towards piping, fitting, and heavy fabrication.

Source: Prepared remarks

Capital allocation

medium confidence
  • Capex ₹25 Cr
    But right now, in FY27, the CAPEX may be lifted to 20 to 30 Cr.
  • Debt Debt disclosed
    Further improving cash flows and operating performance are expected to support gradual reduction in debt levels going forward.

Guidance & targets

Profitability

  • EBITDA Margin (Console Level) Profitability · FY27 · High confidence >19%
    our console level EBITDA will be above 19% in any case.

    — Krishan Lalit Bansal

Order Inflow

  • New Orders Order Inflow · FY27 · High confidence >2,000 crores
    We are expecting more than Rs. 2,000 Cr orders in this financial year.

    — Pankaj Agarwal

Order Inflow Mix

  • Domestic Share of New Orders Order Inflow Mix · FY27 · Medium confidence 60-65%
    You can say like 60% to 65% will be domestic and around 35% to 40% will be the export orders in this financial year.

    — Pankaj Agarwal

  • Export Share of New Orders Order Inflow Mix · FY27 · Medium confidence 35-40%

    — Pankaj Agarwal

Revenue Mix

  • Power Sector Revenue Share Revenue Mix · FY27 · Medium confidence 65-70%
    we in this year, we should be doing almost 65 to 70 percent of our revenue from the power sector.

    — Krishan Lalit Bansal

Working Capital

  • Working Capital Cycle Days Working Capital · FY27 · High confidence 200 days
    our total working capital cycle would be around 200 days in FY2027.

    — Brham Yadav

  • Inventory Days Reduction Working Capital · FY27 · High confidence 15-20 days reduction
    In case of inventory days, we are targeting in FY2027 it will get reduced for further by 15 to 20 days.

    — Brham Yadav

  • Payable Days Working Capital · FY27 · High confidence 70-75 days

    From 42 days today

    We will improve on payable days, which is as of now 42 days, as we are paying in advance for the ordering of the some of the material. So, we are negotiating with the supplier and definitely will have a better negotiation and it will be above 70 to 75.

    — Brham Yadav

Revenue

  • Revenue Revenue · FY27 · High confidence >=1,500 crores
    our commitment is for the coming year that we shall surely like to see that number on the board.

    — Krishan Lalit Bansal

  • Revenue Revenue · FY30 · High confidence 2,500 crores
    At present, the target is Rs. 2,500 by FY2030.

    — Krishan Lalit Bansal

Capacity Utilization

  • Seamless Plant Utilization Capacity Utilization · FY27 · Medium confidence 60-70%
    Seamless plant, we may be able to ramp up to maybe around 60% to 70%.

    — Krishan Lalit Bansal

  • Anjar Fabrication Facility Utilization Capacity Utilization · FY27 · Medium confidence Optimal/Expected Level
    fabrication facility, we should be going up to almost to the expected level.

    — Krishan Lalit Bansal

Capex

  • Capex Spend Capex · FY27 · High confidence 20-30 crores
    But right now, in FY27, the CAPEX may be lifted to 20 to 30 Cr.

    — Krishan Lalit Bansal

What to watch in Q1 FY27

Malwa Power Audit Qualification Resolution

By Q3 FY27
Current Qualified audit opinion
Target Clean audit opinion

Why it matters

Resolves a long-standing audit issue and signals the successful turnaround of a non-core asset, potentially impacting profitability.

by third quarter... we will get a clean opinion, not a qualified opinion from the auditor.

Risks & concerns

  • Malwa Power Impairment & Audit Qualification

    medium

    Historical impairment in the Malwa power segment led to a qualified audit opinion; management expects resolution by Q3 FY27 through tariff revisions and biomass pallet plant.

    Analyst acknowledged

  • Working Capital Cycle Increase

    medium

    Working capital days increased due to strategic choices (reduced payables for discounts), impacting cash flow, though management has a plan to improve it to 200 days in FY27.

    Analyst acknowledged

  • BHEL Order Execution Pace

    low

    BHEL's slower order release pace compared to other clients like L&T, though management states they execute based on delivery timelines and don't hold capacity.

    Management acknowledged

  • Middle East Opportunity Fluidity

    low

    Potential reconstruction opportunities in the Middle East are significant but currently fluid and uncertain, with no immediate inquiries.

    Analyst acknowledged

Q&A highlights

7 direct
HRSG Orders & Thailand Unit Capacity Direct
First of all, our answer is yes. Most of the orders are related to this from this, for HRSG market only from the overseas. ... Thailand is primarily; we are working on job work basis only in Thailand. ... EBITDA margin on this revenue of Rs. 150 Cr will be much higher than 20%? You are right. ... No, nothing is required for this particular unit or for this particular order. Except some normal machinery, this sometimes plus, sometimes minus. I mean, very, very nominal or I will say insignificant CAPEX may be required to execute this particular job.

Clarifies the nature of new HRSG orders, the high-margin job work business model for the Thailand unit, and confirms no significant capex is needed for these orders.

Asked by Pranay Chatterjee

Gross Margin Decline & Product Mix Partial
it's very difficult for us to show all those things on quarter-on-quarter basis because we are a project-based company. ... But one of the reasons was that some small portion of trading activities happened, which we continue to do it the ever year actually. But in this particular year, it happened maybe in quarter 4 also where the value of the material is just almost 100% or 95%. So, that may be one of the reasons.

Explains the difficulty in analyzing QoQ margins for project-based companies and provides a potential reason for the Q4 margin dip.

Asked by Vaibhav Shah

Current Order Book Mix (Alloy/Job Work) Direct
job work values as of now will be less than 20% remaining are all with material orders. No, sorry. It will be around 30%. Job work orders will be around 30% even now also. ... our mix in terms of, I will say, power and oil and gas is for this particular year will be 70% will be going towards power and 30% will be going towards oil and gas, which means almost 60% or maybe around 55 to 60% will be alloy steel and remaining will be carbon steel or the non-alloy steels.

Provides insight into the composition of the current order book, which impacts margins and execution strategy.

Asked by Vaibhav Shah

Capacity Utilization of New Plants (Anjar & Seamless) Direct
we should be at the optimal level as far as the fabrication facility at Anjar is concerned and also for the seamless plant. Seamless plant, we may be able to ramp up to maybe around 60% to 70%. But fabrication facility, we should be going up to almost to the expected level.

Gives clarity on the ramp-up schedule and expected utilization levels for key new manufacturing facilities.

Asked by Vaibhav Shah

Middle Eastern Disruptions & Opportunities Direct
No, right now, sir, it's not there. ... But as you have said, we do see it's a big opportunity which will come our way and we may have to do something out of the way also to grab that opportunity. It may involve some sort of CAPEX or something like that. But still, it is very, very fluid. ... But definitely, it's going to be a big opportunity.

Highlights a potential future growth driver and the company's cautious but opportunistic approach to geopolitical events.

Asked by Vinit

Malwa Power Impairment & Biomass Pallets Direct
we have already put up a biomass pallets plant which shall mitigate this impairment totally. ... And we are sure that in the coming year, this impairment qualification will not be there. ... by third quarter... we will get a clean opinion, not a qualified opinion from the auditor.

Addresses a recurring audit qualification and outlines the strategy to turn around the non-core power segment, with a timeline for resolution.

Asked by Pratik Srivastava

Balancing BHEL Orders with Other Opportunities Direct
Sir, balancing act, we need not to do anything. Right now, if, let us say, BHEL releases the order now. So, we get the corresponding time also accordingly. So, whatever orders we have, we have to put that first and according to the deliveries only, we have to execute it. It is not that if BHEL gives us the order today and they expect us to execute it next day, that's not possible.

Clarifies the company's approach to managing capacity allocation given varying client order speeds and avoiding holding capacity idle.

Asked by Kamlesh

Working Capital Days Increase Direct
We are not saying 200 days. Our projection is 180 days only and that's our first target to achieve it and then ultimately, we will come to 150 days, that also is there. ... Our payable cycles have reduced drastically this year, because we specifically decided on that because we got a very good sort of discount on our purchases, which is reflecting our material cost.

Addresses a concern about working capital efficiency and explains the strategic trade-off made for better margins, outlining future improvement plans.

Asked by Kamlesh

2 min read 5 chapters

Detailed narrative

Strong Core Business Performance & Strategic Pivot

DEE Development reported a strong Q4 FY26 and full year, with core business EBITDA (including other income) growing 64.2% YoY to Rs. 210.5 Cr for FY26. The company has completed a significant portion of its CAPEX cycle, including the Anjar pipe fabrication facility and seamless pipe plant. Management highlighted that the core business (piping, heavy fabrication) is the primary value and margin driver, reflecting better execution and improved utilization.

Non-Core Segment Turnaround & Biomass Focus

The non-core segment is strategically pivoting towards biomass pallet manufacturing to enhance capital efficiency and minimize capital commitment in power. The tariff at Malwa Power has been revised to Rs. 5.22/KWH from Rs. 3.5/KWH, with a retrospective recovery of Rs. 5.52 Cr. Combined revenue from power and biomass pallet is expected to be Rs. 47.71 Cr in FY27, and management expects this segment to become profitable, resolving the audit qualification by Q3 FY27.

Robust Order Book & Revenue Visibility

The company's order book stands at Rs. 2,040 Cr as of March 31, 2026, providing strong multi-year revenue visibility. Execution timelines for orders typically range from 6 to 18 months, with an average of 12 months. For FY27, the company expects to secure over Rs. 2,000 Cr in new orders, with 60-65% from domestic markets and 35-40% from exports, primarily driven by the power sector (60%) and oil & gas (30%).

Capacity Expansion & Utilization Outlook

DEE Development has operationalized its Anjar pipe fabrication facility and seamless pipe plant. Management is confident that the Anjar facility will reach optimal utilization in FY27, while the seamless plant is expected to ramp up to 60-70% utilization in the same period. The company is also exploring further capacity expansion for new sectors like nuclear business, with a planned CAPEX of Rs. 20-30 Cr for FY27, indicating continued investment for growth.

Profitability & Working Capital Management Strategy

For FY26, the company achieved an operating EBITDA of Rs. 189.3 Cr, up 52.9% YoY, with an EBITDA margin of 16.7% (up from 15.0% in FY25). Management guides for a console-level EBITDA margin of above 19% for the coming year. While working capital days increased due to strategic choices (reduced payables for discounts), the company targets a working capital cycle of 200 days in FY27, aiming for 150 days eventually, supported by sales bill discounting and milestone payments.

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