Revenue
Margin
Demand
Guidance
Tone
Metrics raised 1
- FY29 revenue run-rate target of ₹2,500 crores, now expected achievable by FY29 (from prior FY30 plan)
Event Participants
Executives
2 Krishan Lalit Bansal, Brahm Yadav
Analysts
14 Aditya Sahu, Akash Rawal, Anirudh Agarwal, Ankit Gupta, Ankit Soni, Chandresh Malpani, Dhwanil Desai, Kaushal Sharma, Nishant Bhatt, Pranay Chatterjee, Riken Gopani, Vignesh Iyer, Vineet Khatri, Viraj Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Gross Revenue | ₹294.5 crores | +31.6% YoY; driven by piping execution to power & oil & gas, offset by ~₹25 crores of dispatches deferred to Q2 due to Middle East export deferrals |
| Operating EBITDA | ₹49.7 crores | +38.7% YoY; margin at 16.9% vs 16% YoY, aided by better capacity utilization, operating leverage, and initial seamless pipe plant contribution |
| PAT | ₹16.1 crores | +22.4% YoY; margin compression at net level reflects higher depreciation/finance costs from completed capex |
| Order Book | ₹2,428 crores | As of 30 June 2026; includes ₹386.82 crore BPCL piping order, one of the largest single orders in recent history; provides strong revenue visibility |
| Order Inflow (FY27 to date) | ~₹700 crores | Management guides ₹2,000+ crores total FY27 inflow; remainder expected ₹1,300–1,800 crores |
| Net Debt | ₹718 crores | Down from ₹733 crores at FY26 closing; post-preferential allotment, ₹225 crores earmarked for debt prepayment; target ₹400–425 crores by FY27 close |
| Asset Turnover | 1.39x | Improved from 1.33x in Q4 FY26, driven by higher utilization and revenue growth |
| Cash Conversion Cycle | 263 days | Improved from 276 days YoY; inventory at 174 days (down from 243), debtors at 123 days (up from 99), creditors at 34 days (down from 66); target 180–200 days |
| Anjar Utilization | ~50% | Expected 60–65% by FY27 year-end, ~100% in FY28; facility peak revenue potential ₹1,500 crores by FY28–29 |
Geographic & Segment Commentary
- Piping & Heavy Fabrication (Core): Anchors execution and majority of revenue and order book; serves power, oil & gas, process industries across India and exports. Seamless pipe plant now commissioned supports backward integration — management targets ~20% EBITDA on seamless output with 50-50 captive vs external sales mix.
- HRSG & GT Piping: GE continues to award GT orders; HRSG LOI for 15–16 units delayed but no FY27 top-line impact. Siemens MoU signed —
10 units in FY28, 15 in FY29, 25–30 in FY30 (€1–1.5 million per unit). Mitsubishi fresh orders make Thailand facility ~100% booked for next 3 years; Thailand revenue target ₹170–200 crores. - Power Segment (Thermal/Boiler Piping): BHEL pacing slower than expected, but ~₹200 crore order received last quarter with more tenders expected; L&T has awarded all offloaded orders; active discussions with JSW, Hindustan Energy and overseas customers. Mix shift to material-inclusive power jobs raises material cost but lowers conversion cost, keeping EBITDA guidance intact.
- Non-Core (Malwa Power & Pellets): Biomass pellet plant (72,000 MTPA) commissioned in Q1 FY27; FY26 non-core revenue target ~₹80 crores with Malwa tariff of ₹5.44/kWh flowing for full year. PPA EBIT temporarily negative as fuel was diverted to establish pellet operations; new fuel from October will allow full operation of both plants.
Company-Specific & Strategic Commentary
- Balance Sheet Strengthening: ₹300 crore preferential issue (net ₹293 crores) allotted 8 July with BSE/NSE approvals 28 July; ₹225 crores for debt prepayment, remainder for general corporate purposes; improves leverage headroom without straining balance sheet.
- Backward Integration & Seamless Pipe Plant: In-house P91/P92 pipe manufacturing for high-thickness, large-diameter coal-fired boiler piping (800MW/660MW+); not intended for HRSG where imported pipe remains competitive; expected ~20% EBITDA margin on this segment.
- New Sector Expansion – Nuclear & Data Centers: Nuclear facility vision advanced — approvals partially in place, seeking international partner with pre-qualifications; deal targeted to close in Q2 FY27. Data center piping targeted as incremental opportunity; management not reliant on fossil-fuel boilers alone.
- Order Inflow Discipline: FY27 order inflow target ₹2,000+ crores (already ₹700 crores booked); domestic vs export split ~50:50; management sees ₹2,500 crore revenue target achievable by FY29 ahead of FY30 plan driven by huge pipeline across oil & gas and power.
- Operational Leverage: Manpower headcount reduced considerably; no major recruitment expected; cost base expected to remain relatively flat as revenue scales beyond ₹1,500 crores, improving margins materially.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY27) | ₹1,500+ crores | Piping segment ₹1,150–1,250 crores; balance from subsidiaries incl. Thailand. Q1 weakest quarter with ramp through Q4; ₹1,500 crores considered the bare minimum — may exceed |
| EBITDA Margin (FY27) | 19%+ | Supported by operating leverage, seamless plant contribution, and favorable mix; Q1 at 16.9% with margin expansion expected through the year |
| Order Inflow (FY27) | ₹2,000+ crores total | ₹700 crores already received; remainder ₹1,300–1,800 crores; pipeline strong across oil & gas, power, and potential data center contracts |
| Net Debt (FY27 close) | ₹400–425 crores | Benefiting from ₹225 crore debt prepayment; no new debt planned in FY27 |
| Anjar Utilization | 60–65% in FY27; ~100% in FY28 | Peak revenue potential ₹1,500 crores by FY28–29; Siemens visit to clear Anjar facility in August supports ramp-up |
| Cash Conversion Cycle | 180–200 days target | From 263 days currently; debtor reduction via customer bill discounting; inventory expected ~150–160 days by Q2 |
Risks & Constraints
| Risk | Context |
|---|---|
| Middle East Export Deferrals | ~₹25 crores of Q1 dispatches pushed into Q2 as export customers deferred take-offs on Middle East situation; material is ready at company end; no impact on annual guidance if situation stabilizes |
| GE HRSG Order Delay | LOI covering 15–16 units not yet converted to PO; management flags possible delay but no FY27 impact given Mitsubishi and other traction; GE meeting scheduled 14 September; capacity already booked 1.5+ years |
| BHEL Order Pacing | Slower than expected order finalization; tenders expected this quarter with finalization next quarter; management diversified across L&T, JSW, Hindustan Energy and overseas OEMs reducing dependence |
| Thermal Power Demand Uncertainty | Rajasthan cancelled 3.2GW in June citing sufficient renewables; management mitigates via private players (JSW, Moser Baer, Bajaj Hindustan) and diversification into nuclear, data centers, and oil & gas; sees no order concern till 2030 |
| Working Capital Pressure | Debtor days increased to 123; creditor days deliberately kept at 34 to retain MSME compliance and purchase-price leverage; bill discounting ramp-up and inventory optimization targeted to normalize cycle |
| Order Book Execution Dependency | Revenue realization depends on customer drawing release and input information (e.g., GE order in book at ~₹380 crores lacks inputs); ₹1,500 crore target is based only on orders with clear inputs |
Q&A Highlights
OEM Partnerships (GE, Siemens, Mitsubishi)
- Question: Progress on GE HRSG orders and Siemens discussions (Anirudh Agarwal, ValueQuest)
- Answer: GE GT orders continuing but HRSG PO delayed; agreement covers 15–16 units, no FY27 impact as Mitsubishi fresh orders fill gap. Thailand facility now ~100% booked for three years. Siemens MoU signed — ~10 GT units in FY28, 15 in FY29, 25–30 in FY30, each unit worth ~€1–1.5 million; Siemens team visiting Anjar in third week of August to clear facility. Thailand revenue target ₹170–200 crores for the year. (Krishan Lalit Bansal)
Order Inflow Guidance & PPA EBIT Swing
- Question: Is ₹2,000 crore order inflow guidance still applicable given delays? Why did PPA EBIT turn negative again? (Pranay Chatterjee, Burman Capital)
- Answer: FY27 order inflow likely to exceed ₹2,000 crores. PPA EBIT negative because fuel was diverted to commission pellet plant; new fuel supply from October will allow simultaneous operation of both power and pellet plants, changing the scenario. (Krishan Lalit Bansal)
Revenue Split & Margin Guidance
- Question: What revenue split and margins given the ₹1,500 crore target? (Aditya Sahu, HDFC Securities)
- Answer: Piping segment ₹1,150–1,250 crores; balance from subsidiaries including Thailand. EBITDA margin guidance of 19%+ reiterated "without any doubt." (Krishan Lalit Bansal)
Sector-wise Order Inflow Outlook
- Question: Which sectors will drive the remaining order inflow? (Riken Gopani, Capri Global)
- Answer: Pipeline healthy and evenly distributed across oil & gas and power, with data center jobs also targeted; remainder of year inflow expected ₹1,300–1,800 crores minimum, with possibility of higher. (Krishan Lalit Bansal)
Thermal Power Sustainability
- Question: Given Rajasthan's 3.2GW order cancellation, how sustainable is thermal power demand? (Chandresh Malpani, Niveshaay)
- Answer: Company is not solely dependent on fossil-fuel boilers — equal focus on oil & gas, plus new nuclear and data center sectors. Private players (JSW, Moser Baer, Bajaj Hindustan) continue building plants; capacity still cannot cater to all demand; no concern on booking orders till 2030. Company targets exceeding ₹1,500 crore guidance — Q1 weakest quarter, Q4 strongest. Gross margin mix shift to power sector jobs (higher material cost but lower conversion cost) keeps EBITDA at 19%+. (Krishan Lalit Bansal)
Nuclear Entry Strategy & Thailand Expansion
- Question: How will piping requirements and approvals for nuclear and data centers work? Any Thailand expansion? (Akash Rawal, Sanghvi Family Office)
- Answer: Nuclear approvals partially in place; company seeking partner for export market pre-qualification, with discussions in advanced stage — agreement targeted by Q2 FY27. Nuclear value addition much higher than power; data center value addition lower. No Thailand capacity expansion — that unit is a showcase; all expansion in India only. Net debt expected ₹400–425 crores by FY27 close with no new debt planned. (Krishan Lalit Bansal)
Seamless Pipe & P91/P92 Manufacturing
- Question: What percent of HRSG uses P91/P92 pipes captively, and cost savings? (Vineet Khatri, Toro Wealth Management)
- Answer: Seamless pipes for high-wall, large-diameter applications primarily for coal-fired boilers (800MW/660MW+), not HRSG where thin-wall imported pipes remain competitive. Expected ~20% EBITDA on seamless pipe manufacturing supporting bottom line. Captive vs external sales planned at 50:50. (Krishan Lalit Bansal)
Order Book Breakdown & Export Mix
- Question: Order book composition by segment and tonnage; expected HRSG export share in FY27 inflow? (Kaushal Sharma, Equinox Capital Venture)
- Answer: Power segment order book: HRSG India ~₹400 crores, Thailand ~₹200 crores; balance from oil & gas and coal-fired boiler orders. Export expected ~50% of FY27 revenue, possibly slightly lower given strong domestic power pipeline. (Krishan Lalit Bansal)
Order Book & Execution Lead Times
- Question: With ₹2,400 crore order book, should FY27 revenue significantly exceed the ₹1,500 crore guidance? (Dhwanil Desai, Turtle Capital)
- Answer: Revenue depends on customer inputs (drawings, material releases) not just order receipt; some orders (e.g., GE at ~₹380 crores) lack inputs yet. ₹1,500 crore target built only on orders with clear inputs; if orders get delayed slightly, it is actually favorable as it staggers execution. (Krishan Lalit Bansal)
Working Capital Cycle & Tax Rate
- Question: Working capital cycle and effective tax rate for modeling? (Vignesh Iyer, Sequent Investments)
- Answer: Inventory days improved to 174 from 243; debtor days rose to 123; creditor days 34 — intentionally kept low for MSME compliance and purchase-price leverage vs P&L benefit. Target cash conversion cycle 180–200 days. Tax rate: consolidated 20–21%; standalone ~25.17%; quarterly fluctuations from Thailand subsidiary consolidation. (Krishan Lalit Bansal, Brahm Yadav)
Gross Margin Decline & Asset Turnover
- Question: Why have gross margins fallen from 63% to 60–65% levels? What is asset turnover? (Nishant Bhatt, Equity Works Limited)
- Answer: Gross margin dip driven by mix shift to material-inclusive power sector jobs (higher material cost, lower conversion cost) and some impact from Malwa power; EBITDA margin guidance of 19%+ unchanged. Consolidated asset turnover at 1.39x vs 1.33x in Q4 FY26. (Krishan Lalit Bansal, Brahm Yadav)
Key Takeaway
DEE Development Engineers delivered a solid Q1 FY27 with revenue of ₹294.5 crores (+31.6% YoY), EBITDA margin of 16.9% and PAT of ₹16.1 crores (+22.4%), despite ₹25 crores of dispatches deferred to Q2 on Middle East export softness. The ₹300 crore preferential allotment (8 July) funded ₹225 crore of debt prepayment, with net debt guidance of ₹400–425 crores by FY27 close versus ₹718 crores in Q1. The ₹2,428 crore order book, anchored by a ₹386.82 crore BPCL order, supports ₹1,500+ crore revenue and 19%+ EBITDA guidance for FY27, with order inflow guided above ₹2,000 crores. Strategic momentum centers on Siemens GT piping (10 units in FY28 ramping to 25–30 by FY30), Mitsubishi-driven Thailand utilization (100% booked for three years), seamless pipe backward integration at Anjar (~20% EBITDA target), and a planned nuclear sector entry with partner discussions targeted for closure in Q2 FY27. Watch points include GE HRSG order timing, BHEL order pacing, and working capital normalization to 180–200 days. Management expresses confidence in exceeding the ₹1,500 crore revenue "bare minimum" and reaching a ₹2,500 crore run-rate by FY29 ahead of the FY30 target.