DEE Development Engineers in FY26: Growth, New Capacity and a Clear Push for Higher Margins

DEE Development Engineers Limited closed FY26 with a strong jump in scale and profits, supported by robust execution in its core process piping business. Consolidated revenue from operations rose to 1,142 crore, up 38% year on year. Operating EBITDA increased to 189.3 crore, up 52.9%, while PAT grew to 77.2 crore, up 76.9%.

The company framed FY26 as a year where a major part of its growth capex cycle moved into the operational phase. The Anjar pipe fabrication unit was scaled to 30,000 MTPA and the seamless pipe plant at Anjar commenced commercial production. Alongside higher execution, these milestones are central to the company’s margin and operating leverage narrative for the next phase.

Core business execution continues to dominate

DEE reports its performance through a core and non core lens. The core segment includes process piping solutions, heavy fabrication and allied offerings, while the non core segment is biomass based power generation.

For FY26, core business revenue was reported at 1,086 crore, up 46% versus FY25, while the non core segment contributed 56 crore, down 33%. In Q4 FY26, the split was even clearer: 95% of revenue came from the core business and 5% from the non core power segment.

Within the core business, the mix in Q4 FY26 was heavily skewed to process piping solutions. The presentation shows that 94% of core revenue in the quarter was process piping solutions and 6% was heavy fabrication. Process piping solutions delivered Q4 FY26 revenue of 322 crore compared with 258 crore in Q4 FY25, driven by higher execution in Oil and Gas and Power. Heavy fabrication revenue rose to 20 crore in Q4 FY26 from 10 crore in Q4 FY25, led by ramp up in windmill tower and structural fabrication execution.

DEE also highlighted a diversified portfolio that spans piping spools, heavy fabrication, industrial pipe fittings, modular skids and modules, industrial gas plants and its non core power generation business.

The company also noted that FY26 consolidated operating EBITDA includes a loss of 5.8 crore in the non core business and a one time labour code liability of 1.94 crore.

Order book and export profile underline visibility

DEE’s growth narrative is anchored in order visibility. The investor deck reported a closing order book of 1,940.07 crore as on March 2026, with domestic contributing 40% and exports 60%.

Order intake composition in FY26 was shown as 89% process piping solutions and 8% heavy fabrication, with smaller shares attributed to gas and power in the order intake chart. The closing order book chart showed 94% process piping solutions and 6% heavy fabrication, with gas at a small share.

Management commentary in the presentation also highlighted 1,158.22 crore of FY26 order executed, positioning it as proof of execution capability.

On the earnings call, management reiterated confidence in the pipeline and indicated an expectation of more than 2,000 crore of order inflow in FY27. The COO also stated that about 60% of this expected order inflow would come from the power sector, with the remaining from oil and gas. The domestic export mix expectation for FY27 order inflow was stated as 60% to 65% domestic and 35% to 40% exports.

Capacity additions and backward integration are central to the margin story

DEE positions itself as one of the largest process piping players by installed capacity. The deck cites installed capacity of 93,500 MTPA in piping and 32,400 MTPA in heavy fabrication, with seven facilities across India and Thailand.

The Anjar facility in Gujarat is a key part of the company’s scale up plan. The investor presentation describes the Anjar pipe fabrication unit as a modern U shaped unit located near Kandla and Mundra ports, with the stated advantage of reducing inland transport costs and transit time for import export flows. It also states that Anjar’s production capacity excluding heavy fabrication grew from 6,000 to 30,000 MTPA by September 2025.

The seamless pipe plant at Anjar is described as a strategic backward integration initiative. The presentation states the plant has 7,000 MTPA capacity and lists benefits such as cost optimization through in house production, supply security, reduced dependency on external vendors, lead time reduction and improved control through tighter quality monitoring.

During the call, management was asked about capacity utilization. The response indicated that the company expects the fabrication facility at Anjar to reach near optimal utilization in FY27, while the seamless plant could ramp to about 60% to 70% utilization in FY27.

These capacity moves are closely tied to management’s margin ambitions. Management stated on the call that it is confident of being above 19% EBITDA margin at a consolidated level going forward. Separately, the Vision 2030 roadmap in the deck targets 19% to 20% operating EBITDA margin by FY30.

Thailand HRSG visibility adds a new layer to exports

A major point of discussion in the call was HRSG related demand in overseas markets. Management disclosed entering into a reservation agreement with an international EPC company to reserve 60% of total HRSG pipe spool fabrication capacity in Thailand, with a minimum annual job value of US$ 15.27 million.

In Q&A, management confirmed that many of these orders are linked to the HRSG market overseas. It also clarified that Thailand largely operates on a job work basis and that the disclosed value relates primarily to the job work portion, with free issue material supplied by customers. Management agreed with the investor’s inference that EBITDA margins on this revenue could be higher than 20% and stated that no meaningful capex is required to execute the agreement.

The company also mentioned it is discussing HRSG related opportunities with other global players and indicated that capacity reservation style agreements could become a theme.

Non core biomass power: tariff revision and pellet pivot

DEE’s non core power generation business includes two biomass plants in Punjab with total operational capacity of 14 MW. The Abohar plant has 8 MW capacity and the Muktsar plant has 6 MW capacity, both backed by long term PPAs.

The company reported that Malwa Power tariff for the 6 MW plant was revised to 5.22 per kWh from 3.50, with retrospective recovery of around 5.14 crore in FY26. The company also stated an annual escalation to 5.437 per kWh in FY27 and an appeal underway at APTEL for further optimization.

Non core revenue declined to 55.5 crore in FY26 from 82.6 crore in FY25. The deck and management commentary emphasize a pivot toward biomass pellet manufacturing. The pellet facility is stated to have recently become operational and is expected to offset cash burn and stabilize segment profitability.

During Q&A, an investor raised a concern about a qualified opinion related to impairment in Malwa power. Management responded that the pellet plant and tariff revision should mitigate the impairment concern and indicated an expectation of a clean audit opinion by the third quarter.

The FY30 roadmap and what to watch next

DEE’s Vision 2030 roadmap targets revenue of 2,500 crore by FY30, with an implied FY26 to FY30 revenue CAGR of around 22%. It also guides to operating EBITDA margins of 19% to 20% by FY30 and PAT at 9% to 10% of revenue by FY30.

On the call, management characterized near term targets as conservative. It reiterated a 1,500 crore FY27 revenue target from the roadmap, while also suggesting that stronger inflows could lead to outperformance. Management also discussed the possibility of additional expansion capex to address emerging opportunities, including nuclear, while stating that FY27 capex could be limited to 20 to 30 crore excluding any new decisions.

The key investor checklist going forward is straightforward. First is the ramp up of Anjar and the seamless pipe plant to the utilization levels discussed on the call. Second is whether consolidated margins hold above the 19% threshold management referenced, especially as mix and job work versus material supply varies. Third is the trajectory of the non core segment as pellets scale and tariff outcomes stabilize.

DEE ended FY26 with scale, a larger order book, and operational milestones that support a clearer margin and growth narrative. The next few quarters will determine how quickly these new assets translate into steadier cash flows, stronger return ratios and a more predictable earnings profile.