Desco Infratech H1 profit rises 54% on 79% revenue growth

Desco Infratech Limited reported standalone net profit of Rs 9.50 crore for the half year ended 30 September 2026, up 54% year-on-year, after revenue from operations rose 79% to Rs 75.05 crore. Both measures were below the immediately preceding half year ended 31 March 2026.

How did Desco Infratech perform in the half year ended September 2026?

Desco Infratech increased revenue from operations by Rs 33.01 crore from Rs 42.04 crore in the half year ended 30 September 2025 to Rs 75.05 crore in the half year ended 30 September 2026. Net profit rose by Rs 3.33 crore to Rs 9.50 crore from Rs 6.17 crore over the same period, while total income, including other income, increased to Rs 75.29 crore from Rs 42.33 crore.

The company’s reported results were lower than in the preceding six months ended 31 March 2026. Revenue from operations declined by Rs 1.52 crore from Rs 76.57 crore, net profit fell by Rs 70.75 lakh from Rs 10.21 crore, and profit before tax decreased by Rs 84.12 lakh from Rs 13.65 crore to Rs 12.81 crore.

Desco Infratech’s board approved the unaudited standalone and consolidated results on 4 November 2026. K A Sanghavi & Co LLP performed a limited review of the standalone statements under Standard on Review Engagements 2410 and said nothing had come to its attention suggesting a material misstatement; the report states that such a review provides less assurance than an audit.

What changed in Desco Infratech’s costs and earnings per share?

Desco Infratech’s total expenses rose to Rs 62.23 crore in the half year ended 30 September 2026 from Rs 34.08 crore a year earlier, an increase of 83% that exceeded the 79% rise in revenue from operations. Other expenses were the largest cost item at Rs 44.05 crore, compared with Rs 23.15 crore in the corresponding prior-year half.

Employee benefit expense increased to Rs 7.44 crore from Rs 3.90 crore, while cost of material consumed rose to Rs 8.94 crore from Rs 6.30 crore. Finance costs increased to Rs 1.59 crore from Rs 61.40 lakh, and depreciation and amortisation expense rose to Rs 20.16 lakh from Rs 12.54 lakh.

Basic and diluted earnings per share, or EPS, were Rs 12.38 for the half year ended 30 September 2026, compared with Rs 8.04 a year earlier and Rs 13.30 for the half year ended 31 March 2026. The September 2026 result included Rs 25.26 lakh of prior-period items, compared with Rs 42,000 in the preceding half-year period.

Tax charges also increased with profit. Current tax expense was Rs 3.29 crore for the September 2026 half year, versus Rs 2.03 crore a year earlier, while deferred tax expense was Rs 1.28 lakh, compared with Rs 4.72 lakh in the prior-year period.

What does Desco Infratech’s balance sheet show?

Desco Infratech’s total assets rose to Rs 151.87 crore at 30 September 2026 from Rs 103.95 crore at 31 March 2026. Current assets accounted for Rs 138.93 crore at the September date, compared with Rs 94.52 crore at the March year-end, while non-current assets increased to Rs 12.94 crore from Rs 9.43 crore.

Trade receivables increased to Rs 56.67 crore at 30 September from Rs 30.43 crore at 31 March, and other current assets rose to Rs 73.15 crore from Rs 55.97 crore. Inventories were Rs 5.32 crore, slightly below Rs 5.45 crore at the March year-end, while cash and cash equivalents rose to Rs 1.13 crore from Rs 69.26 lakh.

Total current liabilities increased to Rs 65.45 crore from Rs 30.80 crore during the six-month period. Short-term borrowings rose to Rs 30.12 crore from Rs 12.16 crore, while trade payables to creditors other than micro enterprises and small enterprises increased to Rs 24.26 crore from Rs 10.38 crore.

Long-term borrowings were Rs 5.80 crore at 30 September 2026, compared with Rs 2.06 crore at 31 March 2026. Desco Infratech said short-term borrowings include bill-discounting amounts payable as part of the procurement and working-capital cycle.

Why was Desco Infratech’s operating cash flow negative?

Desco Infratech reported net cash used in operating activities of Rs 14.27 crore for the half year ended 30 September 2026. Cash generated from operations was negative Rs 11.30 crore, and net direct tax paid was Rs 2.97 crore, despite profit before tax of Rs 12.81 crore.

The cash-flow statement recorded a Rs 26.24 crore increase in sundry debtors and a Rs 17.18 crore increase in other current assets. These movements were partly offset by a Rs 15.17 crore increase in trade payables and a Rs 1.99 crore increase in trade payables related to bill discounting.

Financing activities generated Rs 18.25 crore in the September 2026 half year, including Rs 15.97 crore of net proceeds from short-term borrowings and Rs 3.73 crore from long-term borrowings. Investing activities used Rs 3.55 crore, including Rs 3.25 crore for fixed deposits and Rs 46.10 lakh for fixed assets and capital work in progress.

Which Desco Infratech activities are disclosed with these results?

Desco Infratech said it provides infrastructure development, general civil construction, engineering, procurement and construction, or EPC, installation, testing, commissioning, operation and maintenance services. Its disclosed project areas include city gas distribution networks, water supply and distribution systems, power transmission and distribution infrastructure, renewable-energy projects and allied contractual infrastructure work.

The company said it has diversified into power distribution infrastructure, general construction services and other allied infrastructure development activities. It identified reportable business segments under Accounting Standard 17 based on service nature, operational activities and financial information available to management, although the supplied filing does not set out segment revenue or profit figures.

Desco Infratech incorporated wholly owned subsidiary Desco Global FZ-LLC in Ras Al Khaimah, United Arab Emirates, on 25 March 2026. By 30 September 2026, it had made no capital contribution to the subsidiary, which had not begun commercial operations and had no assets or liabilities according to its books.

Conclusion

Desco Infratech’s September 2026 half-year filing shows substantial year-on-year growth, with revenue increasing to Rs 75.05 crore and net profit reaching Rs 9.50 crore. The comparison with the March 2026 half year shows a different pattern: revenue, profit before tax, net profit and EPS declined, while receivables, current liabilities and borrowings increased.

The disclosed matters to watch are the financial effects of Desco Infratech’s diversification into power distribution infrastructure and general construction services, and the start of commercial operations at Desco Global FZ-LLC. As at 30 September 2026, the UAE subsidiary had received no capital contribution and reported no assets or liabilities, leaving its future contribution unresolved.