DEE Development Q3 FY26 Earnings Analysis

- The company expects revenue growth of 40% to 45% over the fiscal 2025 base. - Order book for FY27 is anticipated to be around Rs. 1,200 to 1,250 crore at the start of the year, securing about nine months of execution. - Strong pipeline in power sector with expected orders of around Rs. 500 crore in the next 5 months and Rs. 650-700 crore in FY26-27. - Oil and gas sector order inflow to increase from approx. Rs. 100 crore in next 5 months to Rs. 700 crore in FY26-27. - The commissioning of the Anjar plant and 7,000 metric ton seamless pipeline (starting Jan 2026) will bolster production capacity and efficiency. - Expect sustained growth in heavy fabrication with potential Rs. 600 crore bookings in power sector for remainder of current and next financial year. - Overall, a gradual increase in execution rate and order inflows are expected, supporting strong sales and volume growth.

- **Revenue Growth:** Company projects 40% to 45% revenue growth over fiscal 2025 base, supported by strong order book and sectoral momentum. - **EBITDA Margin:** Expected operating EBITDA margin range of 16% to 18% for current fiscal, with potential to reach 18% to 20% if power tariff revisions occur favorably. - **Earnings Improvement:** PAT grew 22.1% year-on-year in H1 FY26; operational profitability up 69% versus adjusted prior-year quarter. - **Order Book:** Healthy and growing with expectations of around Rs. 1,200-1,500 crores order book opening FY27 and pipeline targeting Rs. 1,800 crores order inflows in FY27. - **Capacity Expansion Impact:** Commissioning of Anjar facility and seamless pipeline to boost production capacity and cost efficiency, supporting sustainable earnings growth. - **Potential Risks:** Power tariff uncertainties and order inflow timing may cause minor margin and revenue fluctuations. - **Long-term Outlook:** Confident of sustained growth, improved margins, and enhanced shareholder value.

- The Anjar facility is now fully operational, enhancing capacity and cost efficiency. - The 7,000 metric ton seamless pipeline project is on track, expected to begin commercial production by January 2026, strengthening backward integration and expanding product mix. - For the biomass power segment, a new biomass pellets plant is being set up with minimal investment as a Plan B amid tariff uncertainties. - There is mention of potential CAPEX for hydrogen plant development in the same location if biomass power plans do not materialize. - No immediate equity fund raise required; previous plans for funding working capital needs due to earlier orders are suspended owing to strengthened cash flows and bank credit limits. - Ongoing strategic joint ventures in green hydrogen with international cleantech partners aimed at setting up complete hydrogen plants, though order visibility remains uncertain currently.

- An enabling resolution for potential equity fund raise was passed in September 2025 to meet working capital needs due to earlier than expected orders in the thermal power sector. - Current cash inflows and new credit limits from banking partners have strengthened the financial position. - As a result, the proposed equity fund raise has been suspended for now. - The company does not anticipate any short to medium term challenges in meeting working capital needs. - If future growth necessitates raising funds, specific approval will be sought from the Board of Directors. - No mention of new debt fundraising was made; focus remains on internal accruals and existing credit facilities.

- Opening order book for FY27 expected around ₹1,100 - ₹1,250 crore as of April 1, 2026. - Order inflow for FY26 estimated at ₹1,100 - ₹1,200 crore, slightly lower than previous guidance of ₹1,500 crore mainly due to slower power sector orders. - Power sector orders expected around ₹500 crore in next 5 months of FY26 and ₹650-700 crore in FY27. - Oil & gas sector order inflow about ₹100 crore in next 5 months (FY26), with strong pipeline for around ₹700 crore in FY27. - Overall, the company targets a total order book of about ₹1,600 crore by April 1, 2027. - Management notes improved traction in power sector with discussions ongoing with major customers. - They are preparing a detailed paper on power sector opportunities to be shared soon.