DEE Development Engineers: Powering Ahead with Strong Q2 & H1 FY26 Performance

DEE Development Engineers Limited, a prominent player in specialized process piping solutions, has delivered a robust financial performance for the second quarter and first half of fiscal year 2026. The company's results underscore strong revenue growth, enhanced operational execution, and strategic capacity expansions, positioning it favorably within the industrial landscape. For Q2 FY26, the company reported revenue from operations of INR 270 crore, marking a significant 39.2% year-on-year increase. Operating EBITDA for the quarter rose 47.9% to INR 44.1 crore, with margins expanding by 96 basis points to 16.3%. While Profit After Tax (PAT) stood at INR 17.9 crore, the year-on-year comparison was affected by an exceptionally high non-recurring other income in the prior year, with underlying operational profitability showing a healthy 69% growth. For the first half of FY26, revenue from operations grew 30.3% year-on-year to INR 493.8 crore, and operating EBITDA increased 46.4% to INR 79.9 crore, with margins improving by 179 basis points to 16.2%. PAT for H1 FY26 was INR 31.1 crore, up 22.1% year-on-year, despite increased finance costs.

The company's performance was significantly driven by its Piping Division, which contributed INR 438.5 crore (88.8%) to H1 FY26 revenue. The Power Division added INR 25.4 crore (5.2%), Heavy Fabrication contributed INR 29.4 crore (5.9%), and Gas Plants accounted for INR 0.5 crore (0.1%). This segmental breakdown highlights the company's core strength in piping solutions while demonstrating contributions from its diversified business areas. The management's strategic focus on expanding capabilities and optimizing operations has been instrumental in achieving these results, particularly the ramp-up at the Anjar facility which has led to efficiency gains and better fixed cost absorption.

Strategic Expansions and Future Outlook

DEE Development Engineers has been proactive in its strategic initiatives, particularly in capacity expansion. The company successfully commissioned an additional 15,000 MTPA capacity at its Anjar facility in September 2025, bringing the total installed capacity there to 30,000 MTPA. This expansion effectively doubles their production capabilities, enhancing their ability to cater to both domestic and international clients with greater efficiency. Furthermore, a 7,000 MT Seamless Pipe Plant is on track for commissioning by the end of Q3 FY26, with commercial production expected to commence by January 2026. This will strengthen backward integration, enhance cost efficiency, and expand the company's product mix.

In a significant strategic move, DEE has also ventured into a new business vertical: the design, engineering, fabrication, and manufacturing of pilot plants. These small-scale process plants are crucial for evaluating the feasibility of processes before full-scale production, catering to the R&D needs of companies in sectors like oil and gas, petrochemicals, refineries, specialty chemicals, pharmaceuticals, and nuclear. This initiative positions DEE as a one-stop solution provider for pilot plant requirements, demonstrating foresight in addressing emerging industry needs.

Market Dynamics and Management Confidence

The company's management remains highly confident in its future trajectory, projecting a revenue growth of 40% to 45% over the fiscal 25 base for FY26, with an operating EBITDA margin in the range of 16% to 18%. The order book remains healthy at INR 1,308 crore as of September 30, 2025, supported by robust traction in the power, oil and gas, and process industries. Management anticipates securing approximately INR 500 crore from the power sector and INR 100 crore from oil and gas in the next five months. For FY26-27, the outlook is even stronger, with expectations of INR 650-700 crore from the power sector and around INR 700 crore from oil and gas, both domestically and internationally. The company targets an order book of around INR 1,600 crore by April 1, 2027, with an expectation to book orders worth around INR 1,800 crore for 2027.

Despite a slight impact on revenue and profitability margins due to revised tariffs for biomass power plants, management has demonstrated agility by suspending a proposed equity fundraise, citing strengthened cash inflows and new credit limits from banking partners. This decision reflects a disciplined approach to capital allocation and liquidity management. The company's return ratios have also strengthened, with Return on Net Worth (RONW) at 7.7% and Return on Capital Employed (ROCE) at 9.4% as of September 2025, indicating improved profitability and asset utilization.

Conclusion: Sustained Growth and Strategic Clarity

DEE Development Engineers Limited's Q2 and H1 FY26 performance highlights a period of sustained growth, strategic expansion, and operational excellence. The company's proactive investments in capacity, diversification into new verticals like pilot plants, and strong order book position it well to capitalize on the accelerating capital expenditure cycle in its core sectors. With a clear focus on execution excellence and cost competitiveness, DEE Development Engineers is poised for continued sustainable growth and long-term value creation for all stakeholders. The management's transparent communication and strategic adjustments in response to market realities further reinforce investor confidence in the company's future prospects.