AI assistant
DEE DEVELOPMENT ENGINEERS LIMITED — Call Transcript 2026
May 27, 2026
62378_rns_2026-05-27_20d4452a-5ae1-4367-a832-8ab4597c250c.pdf
Call Transcript
Open in viewerOpens in your device viewer
DEE piping systems
Date: 27th May 2026
Listing Compliance Department
| BSE Limited Phiroze Jeejeebhoy Tower, Dalal Street, Mumbai - 400001 Scrip Code: 544198 | The National Stock Exchange of India Ltd. Exchange Plaza, Plot No. C/1, G Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400051 Symbol: DEEDEV |
|---|---|
Sub: Submission of Transcript of Earnings Conference Call for the Quarter and Financial year ended 31st March, 2026
Dear Sir/ Madam,
Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 please find enclosed the transcript of Earnings Conference Call with investors/analysts held on Friday, 22nd May, 2026 to discuss the Audited Financial Results of the Company for the Quarter and Financial year ended 31st March, 2026.
The above information is also available on the website of the Company at www.deepiping.com.
This is for your information and record please.
Yours faithfully,
For DEE Development Engineers Limited
RANJAN KUMAR SARANGI
Digitally signed by
RANJAN KUMAR
SARANGI
Date: 2026.05.27
17:45:08 +05'30'
Ranjan Kumar Sarangi
Company Secretary and Compliance Officer
Membership No.: F8604
Address: Unit 1, Prithla - Tatarpur Road, Village Tatarpur
Dist. Palwal, Faridabad, Haryana - 121 102
DEE DEVELOPMENT ENGINEERS LIMITED
Regd. Office: Unit 1, Prithla-Tatarpur Road, Village Tatarpur, Dist. Palwal, Haryana- 121102, India
Works: Unit 1, 2 & 3, Village Tatarpur, Dist. Palwal, Haryana- 121102, India
T: +91 1275 248200, F: +91 1275 248314, E: [email protected], W: www.deepiping.com
CIN: L74140HR1988PLC030225 GST Registration No. 06AACCD0207H1ZA
DEE piping systems
DEE Development Engineers Limited
Q4 & FY26 Earnings Conference Call
May 22, 2026
Mr. Krishan Lalit Bansal – Promoter, Chairman & Managing Director
Mr. Pankaj Agarwal – Chief Operating Officer
Mr. Brham Yadav – Chief Financial Officer
Moderator:
Good evening, ladies and gentlemen, and a very warm welcome to the Q4 and FY 2026 Earnings Conference Call of the DEE Development Engineers Limited.
From the Senior Management Team, we have with us today, Mr. Krishan Lalit Bansal – Promoter, Chairman and Managing Director, Mr. Pankaj Agarwal – Chief Operating Officer and Mr. Brham Yadav, Chief Financial Officer.
As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing “*” then “0” on your touch-tone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Anand Venugopal from Adfactors PR. Thank you and over to you, sir.
Anand Venugopal:
Thank you, Nirav. Good evening, everyone. We welcome you to the Q4 and FY 2026 earnings call of DEE Development Engineers Limited.
Before we begin the earnings call, I would like to mention that some of the statements made in today's call might be forward-looking in nature, and hence, it may involve risks and uncertainties, including those related to the future financial and operating performance. Please bear with us if there is a call drop during the course of the conference call. We would ensure the call is reconnected as soon as possible.
I will now hand over the call to Mr. Krishan Bansal Sir, to share his views. Over to you, Bansal Sir.
Krishan Lalit Bansal:
Thank you, Anand. Good evening, everyone, and thank you for joining us.
I hope all of you have had the opportunity to go through our investor presentation, which has been uploaded on the exchanges. Our financial FY26 has been an important year for DEE. We have completed a significant part of our growth CAPEX cycle, particularly with full
DEE piping systems
operationalization of the Anjar pipe fabrication facility and the commissioning of our seamless pipe plant.
At the same time, we have separated the business into core and non-core segments, and the results are showing up in our operating performance. Our core business, piping, heavy fabrication, and others continue to be where we generate the most value and margin, and that is evidenced clearly in our full-year operating performance. Q4 FY26 was a strong close to the year on the back of continued momentum in the core business.
The CFO will talk you through the detailed financials, but I would like to highlight that core business EBITDA (Inc. Other Income) for FY26 was Rs. 210.5 Cr, up 64.2% year-on-year, reflecting better execution, improved utilization, and operating leverage across our facilities. This core business EBITDA excludes the losses from the non-core power segment, which are reflected at consolidated level.
The policy and investment backdrop remains firmly supported. The Union Budget '26-27 continues sustained CAPEX allocation across infrastructure, transport, energy, and industrial corridors, and India's broader CAPEX cycle is gaining traction as corporates in these sectors scale up investments in plant and equipment. Overseas markets, a meaningful part of our core business, are equaling this trend with a clear pick in energy, process industries, and infrastructure. Together, these domestic and global tailwinds open up a strong multi-year opportunity for our core offerings in piping, heavy fabrication, and allied segments.
Within the non-core segment, we are strategically pivoting towards biomass pallet manufacturing with a focus on enhancing capital efficiency, minimizing incremental capital commitment in the power segment, and building a more sustainable and scalable business model over the medium term. On the power side, specifically, the tariff at Malwa Power has been revised to Rs. 5.22 / KWH from Rs. 3.5 / KWH, with a retrospective recovery of almost around Rs. 5.52 Cr. Combined revenue from power and biomass pallet is expected to be around Rs. 47.71 Cr in FY27. We are also pursuing an Appellate appeal for further tariff optimization, along with restructuring initiatives I mentioned. We also recently commissioned the biomass pallet facility, which is expected to offset the current cash burn, stabilize segment profitability, and support margin improvement going forward.
On the core side, during the year we commissioned our seamless pipeline. This backward integration strengthens our capabilities in high-spec applications, improves supply security, supports margins, and reduces lead times. As utilization ramps up, the plant should support further operating leverage and margin improvements. With the CAPEX cycle now majorly complete, I would say, we expect better asset terms, stronger cash generation, and improved return ratios going forward. Further improving cash flows and operating performance are expected to support gradual reduction in debt levels going forward. Our order book stands at Rs. 2,040 Cr, giving us strong revenue visibility and a healthy project pipeline across key segments.
DEE piping systems
Demand visibility across our core end markets, particularly power, oil and gas, process industries in India and overseas remain healthy, and a strong order pipeline gives us confidence in delivering profitable growth and long-term value for stakeholders.
Now I invite our CFO, Mr. Brham Prakash Yadav, to take us through the financial highlights for the quarter and full year ended 31st March 2026. Thank you so much.
Brham Yadav:
Thank you, sir. Good evening to all. I will now take you through our financial performance for Q4 and FY26 for the whole year.
During the quarter, we reported strong growth across most of our key performance parameters, with the full year metrics being the clear reflection of underlying momentum. Before I get into the numbers, I would note that Q4 FY25 was an unusually high base as it absorbed revenue and profit spillover from Q3 FY25 last year. A cleaner read of our performance is, therefore, the full year FY26 PAT up 76.9% year-on-year. Revenue from operations for Q4 was Rs. 361.6 Cr, which again up by 26.3% year-on-year. And for the full year, FY26, it stood at Rs. 1,142 Cr, which again up by 38% year-on-year, driven by healthy execution momentum in the piping segment, supported by strong supply to the oil & gas and power sectors. Operating EBITDA for Q4 was Rs. 65.9 Cr. For the full year, the operating EBITDA was Rs. 189.3 Cr, up by 52.9% year-on-year, supported by higher execution level and operating leverage in the core business, alongside the tariff division on the non-core side. EBITDA margin was 16.7% for FY26 versus 15.0% in FY25. In line with our guidance, profit after tax for Q4 FY26 stood at Rs. 27.7 Cr, reflecting a stable performance on a high Q4 FY25 base. For FY26, PAT increased 76.9% year-on-year to Rs. 77.2 Cr. This overall performance was primarily driven by higher execution momentum and improved capacity utilization across both facilities. Our Rs. 1,940 Cr order book provides strong multi-year revenue visibility, with execution weighted towards piping and fitting and heavy fabrication. Dear friends, we remain focused on disciplined project execution and growing our presence across relevant end markets. With this, I would like to open the question-answer and look forward to receiving your questions.
Thank you.
Moderator:
We will now begin with the question-and-answer session. First question is from the line of Pranay Chatterjee from Burman Capital Management.
Pranay Chatterjee:
My first question is with respect to the couple of HRSG orders that you have received, one very recently. I was doing some research around that and what I understand is globally, especially in the US, driven by the data center infrastructure setup and hence the electricity demand load on the grid, there is a massive multi-year order backlog of gas turbines with GE, Siemens and Mitsubishi. And what I also understand is some of the HRSG systems that are used in these, you are basically going to be supplying the pipes for those, right? So, my question is twofold. One is a yes or no and the other part is maths question. Yes, no question is, is this related? Are these orders related to this multi-year backlog, that is the Thailand order specifically recently?
DEE piping systems
And secondly, I was doing some math with respect to the disclosure that you have given. 60% of Thailand capacity, which is around 14,500, is around 8,700 tons. The revenue is about 150 Cr annually, which works out to 160 per kilowatt realization. Is this right to think that this is "X" material, which is only the value-added portion per kg and hence revenue will be larger? Is that the case? And do you have sufficient capacity available to execute this? Or do you need to do CAPEX.
Krishan Lalit Bansal:
Thank you so much, sir. Thank you so much. First of all, our answer is yes. Most of the orders are related to this from this, for HRSG market only from the overseas. And as far as your understanding is concerned, that is also partially correct. This is all, this is just the value of the job work portion or the value which we shall get from the freeflow material supplied by the customer. And in some of the cases, we shall be supplying the material also, which will add further value to this particular turnover from our unit DEE Thailand.
Pranay Chatterjee:
So, in that case, if I were to think about it, Rs. 150 Cr is the job work value, or if I were to like put it crudely, the gross profit. So, the revenue number should be much higher, right? Is that the right way to think about it?
Krishan Lalit Bansal:
No. Thailand is primarily; we are working on job work basis only in Thailand. So it will not be, there will not be very high incremental increase. There may be some, but you know, primarily that unit is functioning almost purely on job work basis.
Pranay Chatterjee:
Sir, in that case, is it right to say that the EBITDA margin on this revenue of Rs. 150 Cr will be much higher than 20%?
Krishan Lalit Bansal:
You are right.
Pranay Chatterjee:
And from the last part of the question, which is effectively, any CAPEX you need to do to execute this or do you have capacity?
Krishan Lalit Bansal:
No, nothing is required for this particular unit or for this particular order. Except some normal machinery, this sometimes plus, sometimes minus. I mean, very, very nominal or I will say insignificant CAPEX may be required to execute this particular job.
Pranay Chatterjee:
Got it. And the 60%, sir, of production capacity that is reserved, it is on the 14,500, right?
Krishan Lalit Bansal:
That's right.
Pranay Chatterjee:
Got it. Sir, if you allow me, I also had a question on domestic thermal. Should I go ahead?
Moderator:
You can come back for a follow-up question, please. Thank you. Next question is from the line of Vaibhav Shah from Equirus Securities. Please go ahead.
DEE piping systems
Vaibhav Shah:
Yes. Hi, sir. Thank you very much for the opportunity. My first question is on the gross margin. So, on a quarterly basis as well as on a full year basis, the gross margin has declined. So, of this decline, how much is attributable to the commodity inflation and second, to the product mix change? Also, within this product mix, could you share A, alloy mix and B, product versus job work contribution that has changed over FY 2024 to 26?
Krishan Lalit Bansal:
Well, first of all, let me tell you that it's very difficult for us to show all those things on quarter-on-quarter basis because we are a project-based company. We are not a commodity-based company where everything will go in a straight line. So, it is very difficult to explain why it happened and why it didn't happen. So, my request is that please compare it on year-on-year basis if it is possible. But otherwise, there can be n number of factors going in for on quarter-wise quarter dip or quarter-on-quarter abnormally high rise also. So, that's my humble request to you. But I really will not be able to answer specifically that why this margin dip between this Q4. But one of the reasons was that some small portion of trading activities happened, which we continue to do it the ever year actually. But in this particular year, it happened maybe in quarter 4 also where the value of the material is just almost 100% or 95%. So, that may be one of the reasons. Otherwise, there is no specific reason to that, sir.
Vaibhav Shah:
Sure, sir. On this similar line, could you share the current alloy mix and product supply versus job work mix within our outstanding order book?
Krishan Lalit Bansal:
Brham Ji, can you share this thing because I am not 100% up to date on job work and with material values?
Pankaj Agarwal:
Sir, it is not available right now with us. But if required, we can do this exercise. Yes, we will let you know later on. Not handy as of now.
Krishan Lalit Bansal:
But broadly speaking, I will say that it may not be exact numbers, but job work values as of now will be less than 20% remaining are all with material orders. No, sorry. It will be around 30%. Job work orders will be around 30% even now also. But these are very, very approximate numbers. And alloy mix for all our HRSG jobs or all for our thermal jobs in India, they are all alloy jobs.
So, our mix in terms of, I will say, power and oil and gas is for this particular year will be 70% will be going towards power and 30% will be going towards oil and gas, which means almost 60% or maybe around 55 to 60% will be alloy steel and remaining will be carbon steel or the non-alloy steels.
Vaibhav Shah:
Understood, understood. Second question is on the capacity utilization. So, what is the current capacity utilization at the new Anjar plant and seamless pipeline? And how do you see it ramping up in FY27? So, basically, when could we expect the optimum utilization of these two facilities?
DEE piping systems
Krishan Lalit Bansal:
We are quite confident that in FY27, we should be at the optimal level as far as the fabrication facility at Anjar is concerned and also for the seamless plant. Seamless plant, we may be able to ramp up to maybe around 60% to 70%. But fabrication facility, we should be going up to almost to the expected level.
Vaibhav Shah:
Right. This is Anjar facility, that newly inaugurated Anjar oil and gas facility, right? That will be fully ramped up.
Krishan Lalit Bansal:
Yes, almost, I will say almost.
Vaibhav Shah:
And lastly, sir, could you mention the EBITDA margins within the core business for piping segment and heavy fabrication business? And going forward, what would be the sustainable margin for heavy fabrication business? And how do you see the margin expansion for piping business?
Krishan Lalit Bansal:
Sir, again, I will say that on a gross level, I can say with comfort and I can say with full confidence that we shall be above 19% on console level. But the breakup, again, it's very difficult, but you can very well consider that in heavy fabrication also, it will be almost to the same tune, because in the coming year, we shall be doing a lot of jobs with material. And hence, our EBITDA margin may drop on the face of it in terms of percentage, but value-wise, it will increase. So, but you kindly consider that our console level EBITDA will be above 19% in any case.
Moderator:
Thank you. We have a request to come back for a follow-up question. Thank you. The next question is from Riken from Capri Global. Please go ahead.
Riken Gopani:
Thank you so much for the opportunity and congratulations on the great execution. Thank you. Sir, I want to understand in terms of for visibility and what kind of info do you expect this year? I think some of you have mentioned about Rs. 2,000 Cr. Can you just clarify what kind of order inflow you expect in 2027? And which segments would be major contributors, if you could throw some light on that?
Krishan Lalit Bansal:
Pankaj, can you take up this, please?
Pankaj Agarwal:
Let me reply that. Sir, we are expecting more than Rs. 2,000 Cr orders in this financial year. Out of that, the major contributor will be the power sector only. We are expecting around 60% jobs from power and rest from oil and gas.
Riken Gopani:
And will this be a bulk of it? I mean, what would be the mix between domestic orders and export orders?
Pankaj Agarwal:
You can say like 60% to 65% will be domestic and around 35% to 40% will be the export orders in this financial year.
DEE piping systems
Riken Gopani:
Yes. Sir, secondly, if you could help understand, we have seen a major order on the fertilizers by the government company in India. Any development on that front that you are seeing, do you expect anything from that to also sort of flow through?
Pankaj Agarwal:
We are expecting one job, but I am not pretty sure in this financial year whether it will be matured or not. But yes, the government of India is doing great in this fertilizer industry. The new plant is coming up in Namrup. So, we are expecting some jobs from them, but not sure whether it will come in this financial year or not.
Krishan Lalit Bansal:
Pankaj, I will just add on to one more thing that just for the information of all, that you know, we are discussing on a very active mode for one of our export customers for the fertilizer unit. That's another field where a lot of traction we are looking at also can become quite a considerable part of our business. I mean, fertilizer section can also become a considerable part of our business in the coming future.
Riken Gopani:
Interesting. That is very good to hear. And the last question that I have is with regards to working capital. There is some improvement, of course, but how do you see working capital shaping up in 2027?
Krishan Lalit Bansal:
Brham Ji, if you can take up, please.
Brham Yadav:
Yes, thank you. The working capital cycle definitely are on improving trend. In case of inventory days, we are targeting in FY2027 it will get reduced for further by 15 to 20 days. Rather, debtor days are almost fixed between 95 to 100 days. We will improve on payable days, which is as of now 42 days, as we are paying in advance for the ordering of the some of the material. So, we are negotiating with the supplier and definitely will have a better negotiation and it will be above 70 to 75. So, our total working capital cycle would be around 200 days in FY2027.
Riken Gopani:
So, there will be...
Krishan Lalit Bansal:
Sir, just to clarify, just to make you more clearer that why inventory days will reduce, I will just again reiterate that since we are doing most of the jobs, almost 70% of the jobs towards power and I have been telling it earlier also that our cash conversion cycle and our inventory holding time for power sectors is much lower than the oil and gas sector. So that will be the major factor which will be contributing towards reduction in the inventory days.
Moderator:
Thank you. Riken, I request to come back for a follow-up question. I request to all the participants, kindly limit yourself to two questions per participant and rejoin for a follow-up. Next question is from the line of Vinit from Toro Wealth Management. Please go ahead.
Vinit:
Hi, Sir. Good evening and congratulations for the great results. I mean, the business momentum indeed looks very strong. Sir, I have two questions. First question is with respect to the HRSG order that we had received in the previous financial year from GE Vernova. I mean, I want to know what is the current status of execution for that and since, in the similar lines, since the
DEE piping systems
US gas plants vendors are seeing increased order flows, are we also foreseeing any similar orders from GE again?
Pankaj Agarwal:
See, we have a good order book from GE. So, we are not expecting much order book in this financial year because we shall be executing those orders. But for GT piping, definitely, there is a surge of the orders from GE side. So, I am confident that the GT piping orders will come from them.
Krishan Lalit Bansal:
But, sir, again, I will say that apart from GE, like Nooter Eriksen they have fixed our capacities just for this HRSG piping also. We are discussing with other people also like Siemens, we are working. So, we are quite confident that they will also enter into some sort of an agreement like what Nooter has done or we are expecting a lot many orders from them also for this particular segment, HRSG section.
Vinit:
Got it, sir. Fair enough. And, sir, my second question is with respect to the Middle Eastern disruptions that has happened during these uncertainties. I mean, a good amount of reconstruction and rebuilding work is going to happen next, right? So, are we seeing any enquiries coming from that region? If yes, if you can also mention about the nature of such enquiries and the size, that would probably help us get better insights.
Krishan Lalit Bansal:
No, right now, sir, it's not there. Right now, it's not there because everybody is still assessing the loss and still the situation is not normal. Till the situation becomes normal, nobody is going to do anything on an emergency basis. But as you have said, we do see it's a big opportunity which will come our way and we may have to do something out of the way also to grab that opportunity. It may involve some sort of CAPEX or something like that. But still, it is very, very fluid. We just cannot comment on the same right now that, okay, this will be the opportunity. But definitely, it's going to be a big opportunity.
Vinit:
Understood, sir. Those were the questions, sir, from my side. All the best, sir, for the future. Thank you.
Moderator:
Thank you. Participants, kindly limit yourself to two questions per participant. Next question is from the line of Dhwanil Desai from Total Capital Partners. Please go ahead.
Dhwanil Desai:
Hi. Good evening, everyone, and congratulations for a very good execution. So, my first question is that we have given our roadmap till FY30. But if this year we our order book has increased by 50% while we are projecting 20-25% kind of a growth. So, how should we read into this? Is this because the delivery timelines will get extended or are we kind of so how should we read into this number?
Krishan Lalit Bansal:
Sir, my only request is that these are very, very conservative estimates. We may have to do a little bit more work also. You know, as you are saying, and even we are also seeing a lot of traction, we may have to do a little more work, or we may have to start expanding some
DEE piping systems
capacity also to take care of all those things which is happening. And you have rightly said, your math is absolutely right that we may not be able to restrict to just Rs. 1,500 Cr in the coming year, which we have said. So, that's likely to increase. But you know, this is what I will like to say that this is what our commitment is for the coming year that we shall surely like to see that number on the board.
Dhwanil Desai:
All right. Sir, second question, I think it's more of a clarification, but you say that again linked to the order book in the past, we have mentioned that your inventory, because you stock it up at the time of receipt of the order, your inventory kind of moves up in line with the order book. While this year, actually, the inventory has remained almost the same while the order book has moved up. So, is it mainly because of the power sector order flowing through or is there anything else in terms of working capital cycle, which has changed or is likely to change because of the globally what is happening in the supply demand side of the overall power sector
Krishan Lalit Bansal:
Majorly, it is because of power sector, sir, because the deliveries for the power sector raw material is comparatively much larger. So, it started flowing late after we placed the order. So that has helped us. And further, since its execution is also equally fast, so that will help us in the coming year. But in the previous year, the reduction is primarily due to this fact only that we placed the order immediately after receiving our orders. But since the delivery cycles are longer, so, it has not come into our books.
Dhwanil Desai:
Thank you and wish you all the best. Thank you.
Moderator:
Thank you. Next question is from the line of Ankit Soni from Mirae Asset. Please, go ahead.
Ankit Soni:
Yes. Hi, sir. Good evening. So, just wanted to check on the power sector order, which basically what is the current portion of power sector orders in your order? And further on to that, what would be the contribution of power sector revenues in financial year 2027 to total revenues? Yes, that would be one and then I will follow up on that.
Krishan Lalit Bansal:
Sir, we are present, expecting that we in this year, we should be doing almost 65 to 70 percent of our revenue from the power sector.
Ankit Soni:
Okay. And any further, so, what would be the order book contribution right now from, what are the current power sector orders in our order book right now?
Krishan Lalit Bansal:
That's more than Rs. 1,000 Cr even now, sir. That's more than Rs. 1,000 Cr. I think around Rs. 1,200 Cr exact numbers. Pankaj will be able to share, but we are having a substantial high numbers, then you know what we have to execute in this particular year. Of course, some of the orders will spill over to the few coming years also, but at the same time, we are expecting many more orders also in the power sector segment.
Ankit Soni:
Okay. And this will be broadly the thermal power orders, right?
DEE piping systems
Krishan Lalit Bansal:
Thermal from India, sir. Thermal from India and HRSG orders from abroad.
Ankit Soni:
From abroad. Okay. Sure. And one more thing, like, what would be the CAPEX guidance for financial 2027? And turning around, I believe, all of the CAPEX and totally, whatever facilities we have, what would be the overall revenue we could do from the existing facilities after doing the CAPEX of financial 2027?
Krishan Lalit Bansal:
Sir, it will be almost Rs. 2,500 Cr from quite some time. That whatever CAPEX has already been spent, whatever is balanced, we should be able to ramp up on this. But considering the tailwinds, we do feel that it's the right time again to rethink that. We may have to do something for a little expansion on the capacity for particularly for going in for a new sector, which we are seeing a lot of light or green light in terms of nuclear business. So we may have to go for something. But it is still on the drawing board. We shall get back as soon as the decision is taken on that.
Ankit Soni:
Okay. So, broadly, what I could understand is with the overall CAPEX and facility, we could be doing around Rs. 2,500 Cr of revenue by around 2029, I believe?
Krishan Lalit Bansal:
FY30 is our target. But with the increased flow of orders, if it happens, it can happen earlier also. But that's our target. At present, the target is Rs. 2,500 by FY2030.
Ankit Soni:
Sure. Thank you, sir. Thanks a lot. All the best. Thank you.
Moderator:
Thank you. Next question is from the line of Chandresh Malpani from Nivesha Investment Advisory. Please go ahead.
Chandresh Malpani:
Yes, sir. Thank you so much and congratulations on the good set of numbers. So, my first question is with respect to this Notter Eriksen order only. Just want to understand the terms was it like they wanted more capacities to be booked with us but like we negotiated at a 60% and we wanted to keep the rest of the capacities for the other OEMs and cater to the broader the space. Just want to understand on that side.
Krishan Lalit Bansal:
That's true, sir. That's true because ultimately, you never know if you just tie up with one customer there can be always some problems. So, we always prefer that few more customers should always be aligned. But since they are one of the most valued customers, so we have given them a capacity of 60%. As a matter of fact, many people are talking nowadays for capacity reservations. So, that's the first agreement which we have been able to do it. So, we do hope that some more similar agreements may happen. But right now, nothing is on discussion. But preliminary, I mean discussions and exploration things are going on.
Chandresh Malpani:
Okay. Got it. The reason I am asking is because let's say the total requirement for HRSG of this top three OEMs. So, how much percentage are we let's say trying to cater of the total HRSG piping requirement that would happen of the, let's say the current disclosed order book of this OEMs. So, out of that particular total market, how much are we going to target?
DEE piping systems
Krishan Lalit Bansal:
Sir, as we are saying that our very, very conservative estimate is that we have to grow at 20% CAGR. But there is a possibility that this number from 20 may go up to 25 or 30 also. So, we are prepared for it and there is an opportunity also available for that. But to put it in numbers that from whom it will come, how it will come, it is very difficult. I can only say that there is a huge traction. People, suppliers or vendors for this particular product are not available. And our competition is, in India, practically no competition except with one or two players who also have significantly much lesser capacity. And our competition is broadly with Korean people and some Turkish players only.
Chandresh Malpani:
Okay. Got it, sir. And this was more of outside the data center opportunity. But let's say inside the data center, are we looking for rigid pipe as well as an opportunity?
Krishan Lalit Bansal:
We are working on that also. But anything related with metallic piping, we are working. And as a matter of fact, we have a few active inquiries for that. But since it has not matured into an order, we are not saying anything. But we are already in discussion with this segment also.
Chandresh Malpani:
Okay. Thank you so much, sir. And all the best.
Moderator:
Thank you. Participants, kindly limit yourself to two questions per participant. Next question is from the line of Ankit Gupta from Bamboo Capital Partners. Please go ahead.
Ankit Gupta:
Thanks for the opportunity. Sir, if you can talk about how is the availability of alloys steel, particularly P-91, P-92. So, are we importing this from China? And if you can talk about how are we getting the raw material or there has to be some booking for a few months and then only we get that?
Krishan Lalit Bansal:
Sir earlier we had been importing everything either from China or from Europe. But after putting up our own seamless pipeline, which is part of, we have been able to establish the supply chain majorly from India. So, we shall not be highly or I will say that not majorly dependent upon import. So, our preference will be to go in for our own manufactured products only. And we have already got a few approvals and few approvals are likely to come very, very shortly. So, once those few approvals come then we are almost 100% available for any power sector jobs coming in India. As a matter of fact, we have also been able to successfully qualify with some of the foreign players also who may be sourcing the pipes, Pipe of P-91, P-91 all from from our manufacturing unit.
Ankit Gupta:
So, on the seamless pipe side, sir, if you can talk about how the margins, we plan to utilize 50% of the capacity in-house and sell remaining 50% to other players. If you can talk about, like, what kind of margin do we expect in this new plant whenever it ramps up, let's say, in FY28 at higher than 70-80% capacity?
Krishan Lalit Bansal:
Sir basically whatever we shall be using it as part of our backward integration; it will add to our EBITDA levels. You know, whatever purchase margin we have on the purchase, we shall be
DEE piping systems
getting that margin. But wherever we are selling it as independently, since it's a commodity, so the margin may not be very high, but still, it will be around 20%.
Ankit Gupta: Okay, thank you.
Moderator: Thank you. Next question is from the line of Nishita from Sapphire Capital Partners. Please go ahead.
Nishita: Yes, hello. So, I had a clarification question. You mentioned that we can do EBITDA of above 19%. I just wanted to understand, was that in a specific segment or on consol basis that you were guiding?
Krishan Lalit Bansal: Consol, ma'am, consol.
Nishita: Okay, okay. And my next question would be that from the 1,940 Cr of order that we currently have, what is the execution timeline for that? And how much revenue we can book in FY27 from that order book?
Krishan Lalit Bansal: Ma'am, any of our orders run between 6 to 18 months. So, we take an average period of around 12 months for any order execution. So, that's what it is. So, as we were discussing earlier, we may have to ramp up a bit we may not be able to just close at 1500. But again, I will put it that this is our target. This is our target, but we may exceed that target. But this is our commitment, I will say that 1500 we shall surely do.
Nishita: Okay, but this is on the conservative basis.
Krishan Lalit Bansal: Yes, very, conservative numbers.
Nishita: Okay, okay. And the CAPEX, you did not mention how much CAPEX we are doing for FY27?
Krishan Lalit Bansal: You know, as I said, right now, we are done with our substantial part of CAPEX. Only whatever CAPEX is left out from the previous year, we shall be doing that. But we may have to rethink as I was telling a bit earlier that we are discussing a new set of things which we may have to do to capture or to avail the opportunity, which is available in nuclear sector and many other sectors. So, we are working on that. But right now, in FY27, the CAPEX may be lifted to 20 to 30 Cr.
Moderator: Thank you. Nishant, I will request you to come back for a follow-up question. Next question is from the line of Tanay Chatterjee from Burman Capital Management.
Tanay Chatterjee: Yes. My question is on the domestic thermal side. This is some of the data that I saw with respect to the timing of the boiler turbine generator orders being awarded to BHEL and L&T. And hence, this is the project timelines of all the live thermal projects. The conclusion was that the piping erection, which is effectively when the piping needs to go in, will peak in FY27-28, roughly during that period. So, is it true to say that we should expect a massive step up on the
DEE piping systems
domestic thermal ordering side of things over the next, let's say, four to six quarters, if the current 40-gigawatt worth of live projects were to progress in a timely manner? Or do you foresee some delays?
Krishan Lalit Bansal:
Your thought is absolutely right, sir. This thought is absolutely right. But BHEL is going a little slower, but L&T is trying to move very fast. So, this, what we are thinking that BHEL is definitely it's not moving with the speed as it should. I mean, we do not know how it will, they will be able to do it or they might have done some other calculation on that. But L&T is moving quite faster. So, we already have a few orders with them and we are discussing fewer more also with them.
Tanay Chatterjee:
Got it. And hence the second and last question would be that the 2,000 Cr number you gave out in terms of order inflow for the year, is that contingent on some of these BHEL orders materializing or is that going to be additive?
Krishan Lalit Bansal:
No, it's all what we are thinking is, it is definitely contingent to BHELs orders. Got it. Understood.
Tanay Chatterjee:
Thanks a lot, sir. All the best.
Moderator:
Thank you. Thank you. Next question is from the line of Pratik Srivastava from Nivesh Wisdom. Please go ahead.
Pratik Srivastava:
Thank you for the opportunity, sir. So, my question is on this Malwa power impairment, this is the second year now that we have got a qualified opinion. So, what are we, sir, doing for this impairment study on this plant, sir?
Krishan Lalit Bansal:
Sir, as we have been telling, we have already put up a biomass pallets plant which shall mitigate this impairment totally. You know, again, I will say that it may not be as profitable as it used to be two years back. But you know, whatever losses we incurred last year, those losses will not be there. And as a matter of fact, there shall be some positive impact because of tariff revision, and secondly, because of the pallets plants which we have put in. And we are sure that in the coming year, this impairment qualification will not be there. That's what we feel.
Pratik Srivastava:
Got it, sir. So, is there going to be financial exposure? Do we have to make any contingency plans, sir? If, let's say the revised tariffs do not, if Appellate rules against this revised tariff?
Krishan Lalit Bansal:
You know, what we are now calculating is that whatever PSE, RC or the regulatory commission has decided as on date, they are not going to further reduce it because that is their own decision. So, our request is that for the upward revision of those tariffs which they have given us as of now, and what we are saying is that based upon the current level of tariffs, we are expecting both the plants shall be a little positive. They will not be negative. Hence, there is no question of considering any impairment or any financial contingency in that.
DEE piping systems
Pratik Srivastava: When can this be resolved? When can we see a clean opinion on our audit?
Krishan Lalit Bansal: I don't know. Brham Ji, is it possible that we can get it in the coming quarter or it will, it happens only at the year-end?
Brham Ji: Sir, these are the government agencies, so...
Krishan Lalit Bansal: No, no. I am saying audit, audit. From audit point of view, just say.
Brham Yadav: Yes, by third quarter. Okay, so in the audit qualification by the third quarter, right, we will get a clean opinion, not a qualified opinion from the auditor.
Krishna Kumar: Should be.
Pratik Srivastava: Thank you, sir. Thank you.
Moderator: Thank you. Next question is from the Line Kamlesh from Lotus asset managers. Please go ahead.
Kamlesh: Congrats for the strong set of numbers and to the Bansal sir, Pankaj ji and the entire team. Sir, my first question is with, my first question is with regard to the power. So, have we included 5 Cr of retrospective benefit in this quarter?
Krishna Kumar: Yes.
Kamlesh: So, 5 Cr is there in this particular quarter?
Krishna Kumar: Yes.
Kamlesh: And secondly, sir, so like earlier, we were planning to raise the money through equity. So, are we again looking, because the stock has moved up and it has performed significantly. So, are we looking at, are we at the drawing board to further look at that equity raise and trim down the debt to that?
Krishan Lalit Bansal: Sir, we are on the drawing board, first of all, to decide on our strategy. So we shall not be able to say anything right now. And we will when we are clear on our plans that how we want to go about it, what we want to do with, if we have to raise the money. So, we will get back to you, but immediately nothing is decided. So, the moment it is decided, we will come back to you, sir.
Kamlesh: Okay. And lastly, sir, on the power side, as you had highlighted in previous question that the BHEL has been little slow on the order release. So, how are we managing that? How we are balancing that? Because there is this massive order which have come from the GE and various other players. So, because we are keeping that capacity idle or some space for the BHEL, but in
DEE piping systems
the meantime, we may be losing some orders from the other parties. So, how are we balancing that in this particular financial year, like say, 210 odd Cr of L1 is there, but for the last three odd months, we have not been able to get the order. So, in FY27, how much capacity or revenue we have kept for the BHEL so that we don't miss on other orders? So, I am just trying to understand the balancing act which you are doing on the power side.
Krishan Lalit Bansal:
Sir, balancing act, we need not to do anything. Right now, if, let us say, BHEL releases the order now. So, we get the corresponding time also accordingly. So, whatever orders we have, we have to put that first and according to the deliveries only, we have to execute it. It is not that if BHEL gives us the order today and they expect us to execute it next day, that's not possible. So, whenever we get any order, the delivery will start from that order date and that delivery will be anything going between 12 to 18 months.
Kamlesh:
And sir, on the working capital days, like say, during our plant visit, we had highlighted that it would be around 150 odd days. Now, we are saying that it may be around 200 odd days. So, why there is such an increase as compared to the plant visit?
Krishan Lalit Bansal:
We are not saying 200 days. Our projection is 180 days only and that's our first target to achieve it and then ultimately, we will come to 150 days, that also is there. But our target for this particular year is 180 days. I mean, if you will see our numbers, our inventory days have considerably come down compared to last year. Our payable cycles have reduced drastically this year, because we specifically decided on that because we got a very good sort of discount on our purchases, which is reflecting our material cost. So, of course, the inventory days have increased per se, but we have been able to gather much more margin from the purchase side. So, that is the only fallback which we had in this particular year. Otherwise, this year also, if we had the payable days as per the previous year, our profit would have been less, but our inventory days would have been then also less. But we feel that even if the inventory days were 30 days more and if we are able to, let us say, get $1\%$ more EBITDA, that is more beneficial and that's how we have strategized. But again, going forward, we are again thinking that how to manage it comparatively still better. Our strategy this year is that we shall be going in for more sales bill discounting, which will help us to reduce our inventory days drastically. And plus, with many of our export customers, we are likely to get some milestone payments also. That also will help us reduce our inventory days.
Moderator:
Thank you. Kamlesh, I will request you to come back for a follow-up. Next question is from Ankit Gupta from Bamboo Capital Partners. Please go ahead.
Ankit Gupta:
Thanks for the opportunity, sir. If you can talk about on the fabrication side also, we have got some decent orders and that has been scaling up pretty well.
Krishan Lalit Bansal:
I couldn't get your question, sir, properly.
DEE piping systems
Ankit Gupta:
On the heavy fabrication business, we have been doing well. And we have got a big order also of 170 Cr.
Krishan Lalit Bansal:
Actually, basically what I am saying is that first of all, we are ramping up the capacity over there also. Secondly, as you know earlier, all jobs used to be on job work basis. But since last one year, the model is shifting and we are getting the jobs with our materials. So, that's why our turnover is increasing from that particular profile. That's the basic reason for that. Of course, we are ramping up our capacity also.
Moderator:
Thank you. Next question is from Chandresh Malpani from Nivashay Investment Advisory. Please go ahead.
Chandresh Malpani:
Yes. Hi, sir. Thank you so much for the opportunity and congratulations on good execution, sir. Just one question on the HR demand is very, very good, right, from GE and Siemens.
So, this is our time. So, I just want to know your thoughts on why we are holding back from doing more CAPEX and put up more capacity, right? Because I just want to know what you are thinking because let's suppose it's a chicken and egg story, right? If you have more capacity, customer will give more order to us. So, just want to know your thoughts, why you are holding back and yes.
Krishan Lalit Bansal:
Sir, we are not holding that at all. As I told you during the meeting also that we are on the drawing board for that. How should we go about it? You have rightly said that it's a chicken and egg story. So, we have to be little careful in deciding on all those aspects because whatever capacity we build, it has to be sustainable also. It has to be sustainable for 10-15 years. So, that's why it's taking little time. But we are very close to finalizing what we wish to do it and hopefully very soon we shall come out with blueprint that whatever thought is. And what you have said is absolutely right, sir. There is a huge opportunity. We must encash on that. But how to encash? What is our risk appetite? All those things need to be assessed. We are working on that very hard and we shall definitely come back to you very fast on this.
Chandresh Malpani:
Sir, thank you so much. All the best.
Moderator:
Thank you. As there are no further questions. And now I hand the conference over to the management for closing comments.
Krishan Lalit Bansal:
Thank you so much. Thank you all for taking part today. My sincere appreciation goes out to our team and our shareholders for your continued trust and support, which strengthens our resolve to execute our strategy with even greater conviction and confidence. For any further queries, please do reach out to our Investor Relations partners, Adfactors. Thank you so much. Thank you so much for your time.
DEE piping systems
Moderator:
Thank you very much. On behalf of DEE development and engineers limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
This is a transcript and may contain transcription errors. The company or the sender takes no responsibility for such errors, although an effort have been made to ensure high level of accuracy.