Diffusion Engineers Limited Q2 revenue rises 51% to Rs 125.93 crore

Diffusion Engineers Limited reported consolidated revenue from operations of Rs 125.934 crore for the quarter ended September 30, 2026, a 50.7% increase from Rs 83.566 crore a year earlier, while net profit rose to Rs 12.753 crore from Rs 10.165 crore. Revenue increased from the preceding quarter, but profit was lower than June 2026.

How did Diffusion Engineers perform in the September 2026 quarter?

Diffusion Engineers recorded revenue from operations of Rs 125.934 crore in the September 2026 quarter, compared with Rs 110.108 crore in the June 2026 quarter and Rs 83.566 crore in the September 2025 quarter. The year-on-year increase was Rs 42.368 crore, while the sequential increase was Rs 15.826 crore. Other income was Rs 1.873 crore, taking total revenue for the quarter to Rs 127.807 crore.

Net profit was Rs 12.753 crore, up Rs 2.588 crore from Rs 10.165 crore in the September 2025 quarter. However, it was below the Rs 16.677 crore reported in the June 2026 quarter. Profit before tax was Rs 15.220 crore, versus Rs 12.652 crore a year earlier and Rs 20.136 crore in June 2026, while basic and diluted earnings per share were Rs 3.39 against Rs 2.69 and Rs 4.47, respectively.

Why was Diffusion Engineers’ profit lower than in June 2026?

Diffusion Engineers’ September-quarter net profit was Rs 3.924 crore lower than the Rs 16.677 crore reported in June 2026, despite revenue from operations rising by Rs 15.826 crore. Profit before exceptional items and tax was broadly steady at Rs 15.822 crore, compared with Rs 15.676 crore in the preceding quarter. The filing therefore shows that the change below this line was material to the sequential profit comparison.

The share of profit or loss from associates and joint ventures changed to a loss of Rs 60.2 lakh in the September quarter from a profit of Rs 4.459 crore in June 2026. That movement took profit before tax to Rs 15.220 crore from Rs 20.136 crore. Tax expense was Rs 2.467 crore, compared with Rs 3.459 crore in June, including a deferred-tax credit of Rs 45.9 lakh in September versus a deferred-tax charge of Rs 18.5 lakh in the prior quarter.

What did Diffusion Engineers report for the first half of 2026-27?

Diffusion Engineers reported first-half revenue from operations of Rs 236.042 crore for the period ended September 30, 2026, compared with Rs 164.231 crore in the corresponding prior-year period. Net profit for the half year was Rs 29.430 crore, up from Rs 22.430 crore. The first-half result combines the June and September quarters reported in the consolidated statement.

Profit before tax for the six months was Rs 31.498 crore, versus Rs 28.156 crore in the comparable prior-year half. Total comprehensive income was Rs 29.143 crore, compared with Rs 22.528 crore a year earlier. Basic and diluted earnings per share for the half year were Rs 7.84, against Rs 5.95 in the corresponding period of 2025.

Diffusion Engineers reports one operating segment, Welding Fabrication Technology and Engineering. The company says this segment includes manufacturing, trading and job work, but its results do not provide separate revenue, profit or asset figures for those activities. As a result, the filing does not identify which of the three activities accounted for the Rs 71.811 crore first-half increase in revenue from operations.

What changed in Diffusion Engineers’ balance sheet?

Diffusion Engineers’ consolidated total assets stood at Rs 535.197 crore at September 30, 2026, compared with Rs 510.431 crore at March 31, 2026. Current assets were nearly unchanged at Rs 323.821 crore from Rs 323.691 crore, but inventories increased to Rs 116.426 crore from Rs 73.674 crore. The increase in inventories was Rs 42.752 crore over the six-month period.

Trade receivables declined to Rs 99.238 crore at September 30 from Rs 128.179 crore at March 31, a reduction of Rs 28.941 crore. Cash and cash equivalents were Rs 79.250 crore, down from Rs 97.560 crore. Capital work-in-progress rose to Rs 39.539 crore from Rs 22.975 crore, while investments increased to Rs 54.901 crore from Rs 42.986 crore.

Total equity rose to Rs 429.356 crore from Rs 405.586 crore during the period. Other equity was Rs 391.361 crore at September 30, compared with Rs 367.626 crore at the preceding financial year-end, while equity share capital was unchanged at Rs 37.426 crore. The company also reported non-controlling interests of Rs 56.9 lakh, compared with Rs 53.3 lakh at March 31.

How did borrowing and cash flows change for Diffusion Engineers?

Diffusion Engineers reported current borrowings of Rs 30.717 crore at September 30, 2026, up from Rs 28.624 crore at March 31. Total current liabilities increased to Rs 99.689 crore from Rs 98.654 crore. Trade payables to creditors other than micro, small and medium enterprises declined to Rs 34.362 crore from Rs 39.745 crore, while other financial liabilities rose to Rs 4.270 crore from Rs 2.012 crore.

The consolidated cash-flow statement reported a net cash outflow from investing activities of Rs 24.055 crore for the period ended September 30, 2026. This included Rs 16.564 crore spent on capital work-in-progress, Rs 6.563 crore for non-current investments and Rs 4.689 crore of advances for capital assets. The statement also reported net proceeds from short-term borrowings of Rs 2.093 crore and finance costs paid of Rs 1.532 crore.

The auditor’s review covered the consolidated statement for the quarter and six months ended September 30, 2026. Seven subsidiaries included in the results had their interim financial information reviewed by other auditors, according to the report. The auditor also said the group’s share of a Rs 60.2 lakh loss from foreign associates for the quarter was based on interim financial information not reviewed by those associates’ auditors.

Conclusion

Diffusion Engineers delivered year-on-year growth in the September 2026 quarter, with revenue from operations rising Rs 42.368 crore and net profit increasing Rs 2.588 crore. The sequential comparison was different: revenue increased from June, while net profit declined by Rs 3.924 crore as the share of associates and joint ventures moved from a Rs 4.459 crore profit to a Rs 60.2 lakh loss.

The next disclosure to watch is the movement in inventories of Rs 116.426 crore, current borrowings of Rs 30.717 crore and capital work-in-progress of Rs 39.539 crore. Diffusion Engineers also said its employee stock-option grant of 1,00,000 accepted options vests in four equal 25% tranches subject to vesting conditions, and that it continues to monitor developments related to the New Labour Codes.