DEE Development Engineers Limited — Q3 FY26

DEE Development Engineers Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=0g61a828J9o Published: 3 months ago

0:00 Good afternoon ladies and gentlemen. A very warm welcome to quarter 3 and 9 months FY 2026 earnings conference call 0:09 9 seconds of development engineers limited from the senior management we have with us today Mr. Krishnan Lalid Bansil promoter chairman and managing director and Mr. 0:21 21 seconds Brahyadav chief financial officer. As a reminder, all participant lines will be in the listenon only mode and there will be an opportunity for you to ask 0:29 29 seconds questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:37 37 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:45 45 seconds Anand Vinu Gupal from Ad Factors PR. Thank you and over to you Anand. 0:52 52 seconds Thank you, Michelle. Good afternoon, everyone. We welcome you to the Q3 and 9M FYI 2026 earnings call of DE 1:01 1 minute, 1 second 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 1:09 1 minute, 9 seconds in nature and hence it may involve risks and uncertaintities including those related to the future financial and operating performance. Please bear with 1:17 1 minute, 17 seconds us if there is a call drop during the course of the conference call. We would ensure the call is reconnected this soon. I will now hand over the call to 1:26 1 minute, 26 seconds Mr. Kishan Wansal sir to share his views. Over to you Bul sir. 1:33 1 minute, 33 seconds Thank you so much Anal. Thank you so much. Uh good afternoon everyone and thank you for joining us. I hope all of 1:41 1 minute, 41 seconds you have had the opportunity to go through our investor presentation which has been uploaded on the exchanges. 1:49 1 minute, 49 seconds Over the past few quarters, we have been consciously strengthening our core engineering franchise, improving 1:56 1 minute, 56 seconds execution intensity and completing the major building blocks of our growth capex. This phase of investment is now 2:06 2 minutes, 6 seconds nearing completion and we are beginning to see its benefits reflecting uh benefits reflect in operating 2:14 2 minutes, 14 seconds performance, capacity utilization and margin profile. Importantly, our core builders, process piping, manufacturing 2:22 2 minutes, 22 seconds solutions, heavy fabrication and others continue to be our main value accreative 2:29 2 minutes, 29 seconds and margin driving businesses and this is clearly reflected in the improvement in our operating performance over the 2:36 2 minutes, 36 seconds last 9 months. In Q3 FY26, we delivered healthy growth in revenue 2:44 2 minutes, 44 seconds and a bit driven by strong execution in the core business. While the CFO will walk through you through the detailed 2:53 2 minutes, 53 seconds financials, I would like to highlight that core business aida per 9 month FY26 2:59 2 minutes, 59 seconds stood at 129.8 crores representing a yearon-year growth of 175.5%. 3:08 3 minutes, 8 seconds driven by better execution, improved utilization and operating leverage across our facilities. 3:16 3 minutes, 16 seconds This core business aid excludes the losses from the noncore power segment which are reflected at the consolidated level. 3:25 3 minutes, 25 seconds From a broader perspective, the policy and investment environment remains supported as highlighted in the recent UN budget 2627. The government 3:34 3 minutes, 34 seconds government has maintained a strong focus on capital expenditure with FY27 capex budgeted to grow by about 11 to 12% over 3:43 3 minutes, 43 seconds the revised estimate along with sustained allocations toward infrastructure, transport, energy and industrial corridors. This is 3:52 3 minutes, 52 seconds complemented by an encouraging trends in our overseas market as well which form a meaningful part of our core business. 4:03 4 minutes, 3 seconds where investments in energy process industries and infrastructure are also gaining momentum. Together domestic and 4:12 4 minutes, 12 seconds international demand drive uh demand drivers are creating a strong multi-year opportunity set for complex core 4:19 4 minutes, 19 seconds offerings across process piping manufacturing solutions, heavy fabrication and other businesses. 4:25 4 minutes, 25 seconds Strategically during the quarter we have further sharpened our focus by clearly segregating the business into core and 4:32 4 minutes, 32 seconds non core segments. Our core business comprises process piping manufacturing solutions he have the fabrication and 4:40 4 minutes, 40 seconds others which includes uh you know our most use acquisition while the non-core business is the power generation division within the non-core segment. 4:50 4 minutes, 50 seconds We are actively pivoting towards biomass pallet manufacturing and explor exploring the new IT structure to house 4:58 4 minutes, 58 seconds the additional pallet capacity with the objective of fencing capital and limiting incremental cash out from the 5:06 5 minutes, 6 seconds power segment. This approach is aimed at improving capital efficiency, reducing cash burn in the power business, 5:13 5 minutes, 13 seconds enhancing integration with our biomass platform, and creating a more sustainable and scalable model over the medium grounds. 5:23 5 minutes, 23 seconds On the execution front, the Anara facility is now fully operational and is contributing to revenue growth and 5:31 5 minutes, 31 seconds operating leverage as utilization ramps up. In parallel, our seamless fire plant is progressing well and is nearing 5:39 5 minutes, 39 seconds commissioning. As approved by the board, this facility will have an annual quality of 7,000 tons with a capex of 5:45 5 minutes, 45 seconds about 90 crores of which 22.5 crores will be funded through internal approvals. At optimal utilization, we 5:53 5 minutes, 53 seconds expect this plant to generate peak annual revenue of around 450 crores with an IRRa of approximately 30 to 35%. 6:02 6 minutes, 2 seconds Given the high alloy, thick w and application critical nature of the product mix, the plant will manufacture 6:09 6 minutes, 9 seconds thick w seamless pipes up to 120 mm using alloy and stainless steel 6:18 6 minutes, 18 seconds power plants and subc and highspec projects. 6:23 6 minutes, 23 seconds This is strategically important backwardation initiative that will strengthe capabilities in high-spec 6:30 6 minutes, 30 seconds applications improve supply security support margins and reduce lead times. 6:36 6 minutes, 36 seconds With the current capex cycle nearing completion, we expect better as heads, stronger cash generation and a further 6:43 6 minutes, 43 seconds improvement in return ratios going forward. 6:48 6 minutes, 48 seconds Looking ahead, we continue to see good demand visibility for our core business particularly from the power sector apart 6:56 6 minutes, 56 seconds from opportunities in oil and gas and process industries both in India and abroad. With a strong order pipeline, 7:03 7 minutes, 3 seconds improving operating leverage and most of our uh most of our growth capex behind 7:10 7 minutes, 10 seconds us, we believe is well positioned to combine uh to compound profitable growth 7:17 7 minutes, 17 seconds and create sustained long-term value for our stakeholders. 7:21 7 minutes, 21 seconds Now I invite M our CFO Mr. Brahi Yadu to help us through the financial highlights of the quarter in December. Over to Mr. 7:32 7 minutes, 32 seconds Brahashad please. 7:35 7 minutes, 35 seconds Thank you sir. Good afternoon to everyone on this call. 7:40 7 minutes, 40 seconds Uh I will now take you through our financial performance for Q3 and 9 month FY26. 7:48 7 minutes, 48 seconds During the quarter, we reported a strong growth on all our key performance parameters like revenue from operation 7:57 7 minutes, 57 seconds for the Q3 stood at 286.7 cr registering a yearon-year 8:04 8 minutes, 4 seconds growth of 77% and for 9 months stood at 780.4 8:11 8 minutes, 11 seconds cr in INR registering a yearonar growth of 44.3%. 8:18 8 minutes, 18 seconds Our operating data for Q3 was rupees 47.6 cr up by 7 740.9% 8:28 8 minutes, 28 seconds on a yearon-year basis driven by a low base in the previous year and strong 8:35 8 minutes, 35 seconds operating leverage this quarter for the 9 month uh figures for the operating 8:42 8 minutes, 42 seconds IITA stood at rupees 127.6 6 crores which is up by 111.7% 8:51 8 minutes, 51 seconds yearon-year basis. Operating beta uh operating IBITA margin improved to 16.6% 9:00 9 minutes 6% in Q3 FY26 as compared to 3.5% in Q3 FY25 9:10 9 minutes, 10 seconds and stood at 16.3% for 9 months as well up 11.1% from corresponding period last year. 9:22 9 minutes, 22 seconds Therefore, consolidated operating IDA is 127 127.57 9:30 9 minutes, 30 seconds K for the 9 months which is after adjusting one time heat of 4.2 K 9:40 9 minutes, 40 seconds with respect to neighbor code impact and uh uh along with 14.64 64 cr operating 9:49 9 minutes, 49 seconds ebita loss in the noncore business which is power generation division. 9:57 9 minutes, 57 seconds If we in uh exclude these impact both of them 18 uh 84 cr uh if we exclude our 10:08 10 minutes, 8 seconds cooperating would have been 146.4 4 cr instead of 127 5 cr. 10:21 10 minutes, 21 seconds Similarly the operating IITA margin improved to 19.6% so for 9 month FY26. 10:31 10 minutes, 31 seconds Now the overall picture profit after tax is for Q3 FY26 10:39 10 minutes, 39 seconds 18.6 6 cr while 9 month FY26 tax stood at 49.5 10:48 10 minutes, 48 seconds cr reflecting a return to profitability on a quarterly basis and a yearonyear 10:55 10 minutes, 55 seconds growth of 3008.2% for 9 month period. This performance was 11:03 11 minutes, 3 seconds primary driven by operating leverage supported by higher execution momentum and improved capacity utilization. 11:15 11 minutes, 15 seconds Friends, lastly, I would to highlight that our robust order book indicates 11:21 11 minutes, 21 seconds strong multi-year revenue visibility. We remain committed to execute key projects 11:29 11 minutes, 29 seconds to build a project portfolio that supports our profit and expanding our 11:36 11 minutes, 36 seconds footprint across relevant markets. With this, I would like to open the question answer and look forward to receiving your question. Thank you. 11:48 11 minutes, 48 seconds Thank you very much sir. Ladies and gentlemen, we will now begin with a question and answer session. Anyone who wishes to ask questions may please press star and one on their touchstone phone. 11:58 11 minutes, 58 seconds If you wish to withdraw yourself from the question Q, you may press star and two. Participants are requested to use only hand while asking a question. 12:07 12 minutes, 7 seconds Ladies and gentlemen, we will wait for a moment while the question assembles. You may please press star and one to ask questions. 12:21 12 minutes, 21 seconds The first question is from the line of Kam Bagmar from Lotus Asset Managers. Please go ahead. 12:28 12 minutes, 28 seconds Yeah, thanks for the opportunity and excellent performance over the last couple of quarters. So just one question 12:37 12 minutes, 37 seconds just I wanted to understand that as we highlighted in our opening remarks that there was roughly around 14 and a half 12:44 12 minutes, 44 seconds cr of loss because of or aida because of uh uh tariff decision in the power 12:51 12 minutes, 51 seconds business. So if I see uh last year so our revenue contribution from the power business was roughly around 10%. And it 13:00 13 minutes was operating at roughly around 20% AIDA margin. 13:06 13 minutes, 6 seconds So uh even if I see this uh 9 months so like say assuming 9 to 10% of revenue 13:13 13 minutes, 13 seconds contribution like assuming that there has been no tariff revision even like say 10% would have been the revenue contribution and 20% would have been the 13:22 13 minutes, 22 seconds margin. So on our overall margin the impact would not be have been more than 20 bits. So we have reported 17.4% 24% 13:31 13 minutes, 31 seconds margin for business that is piping and fabrication the impact has not been more than 20 30 13:39 13 minutes, 39 seconds dips because the revenue contribution of the power business has only been around 10%. And even in the Aida the contribution was roughly around 8 to 9%. 13:49 13 minutes, 49 seconds So why we are saying that the the Aida impact is roughly around 14.6 odd cr. So 13:56 13 minutes, 56 seconds just wanted to understand that BMG can you answer or should I? Uh yeah please sir. 14:05 14 minutes, 5 seconds Yeah I mean if you can take it it's good otherwise I will go. Uh sir uh you can explain. 14:13 14 minutes, 13 seconds Uh thank you. Thank you Kam G for your question. you know uh uh I will simply I 14:20 14 minutes, 20 seconds mean I will not be able to comment on the exact numbers but you know what I would like to say is that you know one 14:27 14 minutes, 27 seconds of our plants was operate earlier operating at the rate of 8.57 and now we are operating it at 3.5 14:35 14 minutes, 35 seconds rupees that mean there is a loss of 5 rupees per unit so that means further you know if we are right now booking a 14:44 14 minutes, 44 seconds revenue of 1.5 5 cr per month it would have been around 4 crores in in a normal circumstance it would have been 4 14:53 14 minutes, 53 seconds crores. So that means around 2 and 1/2 crores rupees loss is coming every month which will directly impact the aida and 15:01 15 minutes, 1 second the pet only because all expenses we are incurring on that except for the uh very little on the school savings because we 15:09 15 minutes, 9 seconds are running it at slightly lower capacity otherwise you know all other expenses everything is going on and hence it's a direct impact of almost 15:18 15 minutes, 18 seconds around you know uh 3 crores or 2 and 1/2 crores every month which is around 22.5 crores in terms of this thing and if we 15:26 15 minutes, 26 seconds consider power sector our power division also which is in the main company. So there also you know we are getting a hit of almost around 1 and a half to 2 15:36 15 minutes, 36 seconds rupees. So you know there also it is the same impact. So you know net effect translates to actually 14.3 which is the 15:43 15 minutes, 43 seconds exact working which we have done on paper and we can share with you if you want it. there is absolutely nothing hidden in that because it's very clear 15:51 15 minutes, 51 seconds you know as I have tried to explain that it is because the tariff revision has been uh downward so it it it's the 16:00 16 minutes direct impact I agree sir but uh like when we were guiding like around 16:09 16 minutes, 9 seconds 19 to 20% margin before this hit so you know at that time at that time full 16:17 16 minutes, 17 seconds Aida was taken at that time full dish margin was taken. Yeah. Yeah. 16:22 16 minutes, 22 seconds So, so in the core pipeline business we are making 17.4% margin and even if we are making 16:30 16 minutes, 30 seconds so in this 9 months we have done 17.4% AIDA margin. 16:35 16 minutes, 35 seconds So one I have doubt on this margin. So have we took that uh uh labor code impact in the operating abida or it is 16:44 16 minutes, 44 seconds below operating or down link? No. Uh so 4 and a half cr. 16:51 16 minutes, 51 seconds Yeah. Yeah. Let let me explain. 16:54 16 minutes, 54 seconds 4.2 cr is about uh uh already included in the operating vita already uh that hit we have taken. 17:05 17 minutes, 5 seconds We have given 45.8 8 cr of AIDA. Okay sir. And uh 17:11 17 minutes, 11 seconds uh and if you see the uh overall AIDA for this quarter it is 47.6. Yeah. 17:19 17 minutes, 19 seconds Yeah. So I want to uh just ask that is this 45.8 crida which you have mentioned as a core operating. 17:29 17 minutes, 29 seconds So does it include 4.2 cr of labor import or not sir? Because otherwise when Yes. 17:37 17 minutes, 37 seconds Yes. It it is already included. 17:41 17 minutes, 41 seconds So that's why the whole comparison becomes uh non- meaningful because because when we compare with the uh AIDA 17:52 17 minutes, 52 seconds because overall AIDA doesn't have the impact of labor code while your core operating AIDA has the impact of this uh 17:59 17 minutes, 59 seconds 4.2 2 cr pardon. 18:07 18 minutes, 7 seconds So when you have so you have given 45.8 cr of abida core business abida. 18:14 18 minutes, 14 seconds Yes. So does it include the labor code impact or not? 18:21 18 minutes, 21 seconds Uh just a minute. 18:48 18 minutes, 48 seconds Yeah, it improves. 18:52 18 minutes, 52 seconds Okay. So can you uh tell the figure what is the sir abida core abida before this 18:59 18 minutes, 59 seconds labor code impact because so I would just ask my to patient sir you have given the total 19:07 19 minutes, 7 seconds abida 47.6 cr which is before the impact of labor code and you have given the 19:14 19 minutes, 14 seconds core aida for your uh like say piping and fabrication which is 45.8 8 and if I 19:22 19 minutes, 22 seconds uh deduct this 45.8 from 47.6 then the residential AIDA which is 1.8 19:31 19 minutes, 31 seconds it is for the power business when we are saying that our power business is making losses then how can there be the 1.8 cr 19:38 19 minutes, 38 seconds abida then positive abida so that means that in 45.8 8 cr we have took the impact of labor code so it is not 19:47 19 minutes, 47 seconds comparable you should have given the abida which is before the labor code impact in the presentation 19:54 19 minutes, 54 seconds anyway if there is any confusion anyway anyway kam if there is any confusion we will uh send the revised filing on the 20:02 20 minutes, 2 seconds stock exchange but again let me make it very clear that you know our original guidance was 18 to 20% I mean without 20:10 20 minutes, 10 seconds considering the impact of uh uh this tariff reven and at that time there was no thought of uh that this labor code 20:18 20 minutes, 18 seconds impact will also come. So even if we exclude this labor code labor code impact you know we are absolutely 20:26 20 minutes, 26 seconds absolutely I'm saying as per the original guidance only you know just considering the impact of the power 20:34 20 minutes, 34 seconds power division tariff so you know we have given we have been giving the guidance in all our last three calls 20:41 20 minutes, 41 seconds that you know we shall now be doing anything between 16 to 18% considering this particular loss and we are 20:49 20 minutes, 49 seconds absolutely on track as a matter of you know we are much better than you know what we have projected in the last two calls on this particular subject 20:58 20 minutes, 58 seconds no no I I I totally appreciate that it's more of a let's say data presentation issue there's nothing 21:06 21 minutes, 6 seconds data I mean questionity and no we will we will we will rectify 21:13 21 minutes, 13 seconds we will rectify that we will rectify that since you know there is a change of team there may be slight issues here and there and we will 21:21 21 minutes, 21 seconds rectify that and immediately send a revised filing on this exchange today itself. 21:28 21 minutes, 28 seconds So secondly uh on the now you have highlighted that your core business. So 21:35 21 minutes, 35 seconds in this 9 months we have done 17.4 of aida margin. So now going forward your 21:43 21 minutes, 43 seconds CMX will come in and you will have a far better execution as the orders are coming from the power sector. So where 21:50 21 minutes, 50 seconds do you see our margins only on the core business because power as you had highlighted that lot of things happening 21:57 21 minutes, 57 seconds there. So going forward in FI27 where do we see our 18 to 20% sir as we have been telling it 22:05 22 minutes, 5 seconds will be 18 to 20% in this range there's absolutely no doubt on that 18 to 20%. 22:14 22 minutes, 14 seconds And lastly sir, what is the uh uh commentary on the orders new order coming in? So what level of orders we 22:22 22 minutes, 22 seconds are seeing or to book in this particular uh quarter? Sir in this quarter you know we are well on 22:30 22 minutes, 30 seconds track uh to get many orders. I mean many bids have been opened and we have been declared L1 and we are not able to uh 22:39 22 minutes, 39 seconds disclose it uh you know till we get the formal order. But uh I can tell you that we whatever anticipations, whatever 22:46 22 minutes, 46 seconds guidances we have given earlier, it stands true and uh you know many many tenders I will say that have been opened 22:53 22 minutes, 53 seconds and uh we are quite we are L1 in many of those. 22:58 22 minutes, 58 seconds Okay. And what would be the ballpark size of those order like say uh maybe 300 to 400 maybe 300 to 400. 23:08 23 minutes, 8 seconds Okay. where we are almost near to L1. 23:11 23 minutes, 11 seconds Uh sir, I'm sorry to interrupt you. Uh Mr. Bmar, I would request you to kindly rejoin the queue for followup questions, please. There are others who are waiting for their time. 23:20 23 minutes, 20 seconds No, you should no. 23:24 23 minutes, 24 seconds Thank you. We'll take the next question from the line of Utkash Chanana from SMC Private Wells. Please go ahead. 23:32 23 minutes, 32 seconds Hello. Am I audible? 23:35 23 minutes, 35 seconds Yes sir. But there is a background noise from your end. I would request to kindly move to the quieter please. 23:42 23 minutes, 42 seconds Sure sir. Good afternoon and congrats for a good performance sir. I just wanted to ask that uh why is the current 23:48 23 minutes, 48 seconds tax in this quarter so low and uh for future estim for future estimates can you guide what can be the tax we can assume for our estimates? 24:02 24 minutes, 2 seconds I could uh bra could you get his question? I think it's related to tax or what tax the tax charge this quarter is of 8%. 24:16 24 minutes, 16 seconds There is a just a minute there is a defer tax as well. 24:23 24 minutes, 23 seconds Uh hello hello. Uh yes sir. So I just wanted to ask that what can be the normalized tax rate we can take for 24:30 24 minutes, 30 seconds future estimates uh 22 uh% plus uh uh S and search charge it is 25.17%. 24:40 24 minutes, 40 seconds All right so thank you so much. 24:42 24 minutes, 42 seconds Yeah thank you thank you a reminder to all the participants that you may please press star and one to ask questions. 24:51 24 minutes, 51 seconds The next question is from the line of Dash D from Nexa Securities. Please go ahead. 25:04 25 minutes, 4 seconds Hello D. Please proceed with your question. I have unmuted your line. 25:10 25 minutes, 10 seconds Yes. Uh good afternoon sir. So my question is regarding the pallet which we are going to start from the next 25:16 25 minutes, 16 seconds quarter. So can you just uh reiterate on the timeline and from FIA 27 it will 25:24 25 minutes, 24 seconds will it be beta neutral or will it still be there will be some operating losses for the power division. 25:32 25 minutes, 32 seconds Uh it will be absolutely a beta neutral. It will be absolutely a beta neutral. 25:37 25 minutes, 37 seconds Our pallet plant is about to get commissioned and uh the trials are going on and we may make some sale in the 25:46 25 minutes, 46 seconds month of March but you know the it full capacity sales will start uh maybe in the month of April and it will be 25:54 25 minutes, 54 seconds definitely a neutral. There will not be much gain. There may be still very little gain but uh you know whatever losses we have incurred in this 26:03 26 minutes, 3 seconds particular year which which is almost which is going to be almost 36 crores will not be there in the coming year. 26:10 26 minutes, 10 seconds Okay sir. Got it. So from quarter 27 you can expect to be that's it. I mean this loss will not be 26:17 26 minutes, 17 seconds there. You can assume just that this loss will not be there but there may not be any gain also much gain also. Okay. 26:24 26 minutes, 24 seconds Got it sir. Thank you. Yes. 26:32 26 minutes, 32 seconds Thank you. The next question is from the line of Prisha Sha from RS Family Office. Please go ahead. 26:40 26 minutes, 40 seconds Uh hello. Uh am I audible? Yes, ma'am. Please. Yes. 26:46 26 minutes, 46 seconds Okay. Um hi sir, good morning. So I have good uh good afternoon. I have a couple of questions. First being you know with 26:53 26 minutes, 53 seconds the 3x revenue growth target which you have given for over 3 to 5 years. So what specific operational efficiencies 27:00 27 minutes are being implemented to ensure that our asset turn stays above 3x 5x range. 27:09 27 minutes, 9 seconds You know the our major angar expansion is going to be responsible for that. We shall be doing lot of uh you know 27:18 27 minutes, 18 seconds revenue from that particular plant and at the same time this being very near to the port we shall be having lot of saving in terms of logistics cost plus 27:27 27 minutes, 27 seconds at the same time this being an absolutely new setup which has been set up considering all lean manufacturing 27:34 27 minutes, 34 seconds principles. We expect a very huge operational leverage also which is as a matter which has started showing in our 27:42 27 minutes, 42 seconds present results also and you know this plant will be dedicated purely for oil and gas sector and seamless pipe manufacturing business and our Tatar 27:51 27 minutes, 51 seconds plant our earlier plant shall be dedicated to the power business. You know in power business we get much 27:58 27 minutes, 58 seconds higher revenue because of the nature of the work we perform and that is the basis of uh reaching 3x level by 30. 28:08 28 minutes, 8 seconds Okay sir understood. I have one more question pertaining to uh industry. So you know with the global interest now 28:15 28 minutes, 15 seconds being focusing on nuclear energy which is reviving how is D utilizing its NPC 28:22 28 minutes, 22 seconds qualified capabilities to secure the larger share of these international piping contracts. 28:30 28 minutes, 30 seconds We have we are already in advanced stage of discussions with NPCL and you know some private players also who are 28:38 28 minutes, 38 seconds setting up the plant right now and uh you know that is our next focus on the business growth you know sometimes 28:46 28 minutes, 46 seconds people ask that what after uh you know this present cycle of power sector uh finishes then you know to answer uh that 28:55 28 minutes, 55 seconds to everybody is that you know we are having lot of focus on diversity diversify ourselves into nuclear 29:02 29 minutes, 2 seconds business into semiconductors business and you know pharma business that's our going to be our next major line of 29:09 29 minutes, 9 seconds diversifications of course in the piping manufacturing solutions only nothing special but you know our focus may shift 29:18 29 minutes, 18 seconds to these particular sectors in a to a large extent okay sir that that answers my question 29:27 29 minutes, 27 seconds thank you so much for the opportunity Thank you. 29:32 29 minutes, 32 seconds Thank you. You may please press star and want to ask questions at this time. The next question is from the line of 29:40 29 minutes, 40 seconds Ripunjayal from Amar Alliance Equity Research Private Limited. Please go ahead. 29:48 29 minutes, 48 seconds Good afternoon sir. Yes please. 29:55 29 minutes, 55 seconds Good afternoon sir. First of all, I want to congratulate you on an excellent result this quarter. I have few 30:02 30 minutes, 2 seconds questions pertaining to your business operations. 30:07 30 minutes, 7 seconds Uh if you may allow I need to understand the inventory holding when we see and an analyze 30:15 30 minutes, 15 seconds the inventory holding comes to a greater period of time as compared to 30:22 30 minutes, 22 seconds other businesses. Would you please uh put some light on it sir? As per our total sales, how much inventory do we 30:30 30 minutes, 30 seconds need to hold on our stock group and how does this uh business operate? 30:38 30 minutes, 38 seconds Uh so this question uh is coming every time and we are trying to respond it every time also. But again you know I 30:46 30 minutes, 46 seconds will uh just uh uh try to explain you once again you know since we are a projectdriven company. So you know we 30:55 30 minutes, 55 seconds have to do everything as per the requirement of the projects. It's all they are all 100% tailor made items which we are making and they are made as 31:04 31 minutes, 4 seconds per the customer specs and we say that it's built to print. It is not a standard product that we will uh 31:11 31 minutes, 11 seconds manufacture it, store it and uh distribute it through our distributor network. So you know whenever we get an order we have huge amount of 31:19 31 minutes, 19 seconds specifications involved for each order and there is a particular vendor list involved that we have to buy the material from a particular vendor only. 31:27 31 minutes, 27 seconds So you know that all those things force us that as soon as we get the order we have to immediately place our orders on 31:35 31 minutes, 35 seconds our vendors because many of the items will come from import and you know the sea time shipment and the uh 31:43 31 minutes, 43 seconds manufacturing time I mean most of the products will be manufactured against our you know requirements. We are not 31:50 31 minutes, 50 seconds sourcing practically anything you know which are available off the shelf. Our buying from the traders is hardly 1 to 2% of our total buying. Rest every 31:59 31 minutes, 59 seconds buying is coming from the manufacturing mills and 50% of it is import also. So you know this forces us that you know we 32:07 32 minutes, 7 seconds have to place the orders immediately and you know that creates a situation where we have to hold the inventory as per our 32:14 32 minutes, 14 seconds you know order booking. You know our order booking is let us say today is around 1,300 crores. So you know we have to have an inventory of almost 600 500 32:24 32 minutes, 24 seconds to 500 of our words just for raw material and other things only. So that is the real cause for our inventory and 32:31 32 minutes, 31 seconds this is our nature of business because we have to follow all the specifications given by the customer and we have to 32:38 32 minutes, 38 seconds maintain all the item we have to get the items first and then only you know we can start manufacturing the spools or 32:46 32 minutes, 46 seconds the skids you know which we are manufacturing. That's the main cause for that. So you know you have to consider our inventory not from the previous 32:54 32 minutes, 54 seconds previous year sales. You have to consider our inventory considering the present order book. 33:03 33 minutes, 3 seconds That means the moment we have more of orders in hand and executed order also in hand. That means our inventory is 33:10 33 minutes, 10 seconds inventories are ought to rise because we need to be uh ordering and we need to hold that specific inventory for that particular project or the order in the coming execution cycle. 33:20 33 minutes, 20 seconds Correct. Correct. Correct. Correct. Absolutely sir. Oh okay. Okay. Okay. Fair enough sir. 33:26 33 minutes, 26 seconds Sir I have a another question on your uh existing bet cycle sir. Sure. Uh we 33:32 33 minutes, 32 seconds understand that uh we brought in uh we came to public the IPO came in one and a half two years back and now uh there was 33:40 33 minutes, 40 seconds an expansion further. Is there uh since we have a good margins on our business I see are able to reduce our debt cost 33:50 33 minutes, 50 seconds or interest cost it would directly impact the uh bottom line per se of the business. Is there any vision of the 33:59 33 minutes, 59 seconds management towards reducing the debt uh going forward? 34:04 34 minutes, 4 seconds Sir, yeah. Yeah. Yeah. Definitely. Let let me again answer that question. Uh sir, you know as I just said in my 34:11 34 minutes, 11 seconds opening remarks that you know our capex cycle is almost at the uh finish finish line stage. So you know whatever capex 34:20 34 minutes, 20 seconds needs to be done I I will say 95 to 98% capex will that happened within March of 34:28 34 minutes, 28 seconds this financial years and you know in the coming years whatever new capex will be there it will be primarily for maintenance purposes only which may 34:36 34 minutes, 36 seconds range between 10 to 15 cr or something like that. So you know there is absolutely no 34:42 34 minutes, 42 seconds no new inflow of any term loan or something like that and you know every year we shall be paying almost around 40 34:49 34 minutes, 49 seconds crores uh towards repayment of the debt which is definitely going to uh reduce our burden on the uh this uh interest 34:59 34 minutes, 59 seconds cost and other things. Plus you know we anticipate that you know there will be huge improvement in interest cost 35:07 35 minutes, 7 seconds because of positive cash flows which we are expecting in the expecting in H1 of FY27 FY27. So you 35:17 35 minutes, 17 seconds know these two factors make us quite upbeat that you know we should be able to reduce our financial cost much lower 35:24 35 minutes, 24 seconds than you know what we shall be having in this year. 35:29 35 minutes, 29 seconds Thank you. Thank you so much sir. I have just one last question if you could allow me and that is a in our own business that is customized piping 35:37 35 minutes, 37 seconds solution that we call in the investor presentation also at the optimum utilization of our existing capacity 35:46 35 minutes, 46 seconds what should be our top line at that level once we achieve above 90% of the22 35:53 35 minutes, 53 seconds production capacity sir 2300 to 2500 sir 2300 to 2500 with the present facilities. 36:03 36 minutes, 3 seconds Sure sir. 36:05 36 minutes, 5 seconds Sure sir. Thank you so much sir for your valuable time and all the best for the coming sir. Thank you. Thank you sir. Thank you so much. 36:17 36 minutes, 17 seconds Thank you. The next question is from the line of Ram Modi from Prauas Leela. Please go ahead. 36:24 36 minutes, 24 seconds Hi. Hi sir. 36:27 36 minutes, 27 seconds I'm I'm sorry just joined little late but I just wanted to check about our power plants in north uh sir we have 36:36 36 minutes, 36 seconds been I think we lost almost 15 16 those power plants so whether we see 36:43 36 minutes, 43 seconds them getting resolved over next 6 months or it will take a longer time on the litigation side. 36:50 36 minutes, 50 seconds Yes sir, you know I will say that I I will talk in first I will talk about our older power plant which is in the name 36:58 36 minutes, 58 seconds of Balwa Power Private Limited in which you know our tariff got revised from almost 8.5 to 3.5 rupees. it's you know 37:08 37 minutes, 8 seconds final hearing with the PAC were held around 10 15 days back and we are expecting uh order at any given time and 37:16 37 minutes, 16 seconds you know again I will say that in that order we will not get definitely get uh 100% relief but you know whatever relief 37:24 37 minutes, 24 seconds we are expecting is that you know it should be at par with the tariff which we are getting at power division you 37:31 37 minutes, 31 seconds know where it will it will become sort of a cash neutral thing there will not be any further drainage of uh cash from 37:38 37 minutes, 38 seconds the operations of the power plant if just by getting this new tariff order. 37:44 37 minutes, 44 seconds But you know again as we have been telling to mitigate that situation we have already put a pallet manufacturing 37:51 37 minutes, 51 seconds unit for biomass pallets and it's under commissioning and we may be declaring its cood very shortly. So you know with 37:59 37 minutes, 59 seconds that that in place you know definitely you know whatever was the negative impact that will be removed altogether 38:07 38 minutes, 7 seconds and we may not be earning very high income in that but it will not be a cash drain. 38:16 38 minutes, 16 seconds Okay and on the second power plant sir same same question I'm telling because in the second second system the tariff 38:26 38 minutes, 26 seconds was revised to 5.87 87 or something like that for which we have already filed our appeal with the high court. It is still 38:32 38 minutes, 32 seconds to be heard. So you know we are not sure when that outcome will come but what I'm trying to say is that you know with the 38:39 38 minutes, 39 seconds tariff of this 5.8 and if we get a similar tariff of let us say 5.5 or something for the Malva power and with 38:47 38 minutes, 47 seconds the uh commissioning of the pallet plant. So you know we shall be cash neutral or we shall be a bida neutral uh 38:56 38 minutes, 56 seconds from this particular division and you know whatever loss we are going to incur in this particular financial year which is around 36 goes will not happen in the 39:05 39 minutes, 5 seconds FY27 at all but I'm just lastly sir on this itself 39:12 39 minutes, 12 seconds sorry for extending this but if suppose the husk or those prices move up or down whether this 5 rupe 80 based production 39:21 39 minutes, 21 seconds cost will remain relatively stable for us because again this would be a long-term PPA which will be signing with the PLA electricity board. 39:29 39 minutes, 29 seconds So we are practically not using any husk we are using petty straw for which the price is not likely to vary much and you 39:37 39 minutes, 37 seconds know that point escalation also we get uh you know in the PPA. So since we are not using uh pett husk so you know we 39:45 39 minutes, 45 seconds are quite well insulated from the fl escalation since we are using only pisro. 39:54 39 minutes, 54 seconds Okay because I think this year we are PNL actually got significantly ded because of this itel power plant itself. 40:01 40 minutes, 1 second Yeah I am telling you around 36 crores is the drain right this year in full year this will this much will be the total drain. 40:10 40 minutes, 10 seconds Okay. And uh sir secondly on uh you know our guidance on the year end powers you 40:18 40 minutes, 18 seconds know the order book still remains the same or we still seem seeing some delays on this. 40:23 40 minutes, 23 seconds No no we we are absolutely on track sir we are absolutely on track since you joined late. I tried to explain it from the transcript. No need for repeating. 40:32 40 minutes, 32 seconds Sorry. 40:32 40 minutes, 32 seconds Yeah I have already told that we we are we are well on track sir. I will just tell them we are well on track. Okay. 40:40 40 minutes, 40 seconds Thanks a lot, sir. Thank you. Thank you. 40:43 40 minutes, 43 seconds Thank you. Before we take the next question, a reminder to all the participants that you may please press star and one to ask questions. The next 40:52 40 minutes, 52 seconds question is from the line of Prashant, an individual investor. Please go ahead. 40:57 40 minutes, 57 seconds Hello. Um yes, audible. 41:02 41 minutes, 2 seconds Yeah. Uh thanks for the opportunity. I have a couple of questions. Uh actually if I look at slide number 15 of your 41:09 41 minutes, 9 seconds presentation you have uh it is mentioned that the order book is 133 cr as of 31st December 25. 41:19 41 minutes, 19 seconds Uh and uh there is a domestic and an export split also given. Uh if I want uh could you please break it down into how 41:27 41 minutes, 27 seconds much is PSU and how much is nonPSU split of this order book. 41:35 41 minutes, 35 seconds That is difficult to answer immediately but you know in the coming year lot of PSU business will be there which may be 41:41 41 minutes, 41 seconds almost around uh uh you know domestic revenue it may be around 40 to 60% uh of 41:49 41 minutes, 49 seconds the domestic revenue may come from PSUs only in the coming years okay but it's a ballpark figure I I mean I'm 41:58 41 minutes, 58 seconds just uh telling you from my mind otherwise if detail is to be required we have to work it So uh is it that I mean and export most of the orders is from private players. 42:11 42 minutes, 11 seconds Export is all private players only. Export is always from private players. 42:16 42 minutes, 16 seconds Okay. Uh and to one of the earlier questions uh you had mentioned that inventory should be looked uh in 42:23 42 minutes, 23 seconds relation to the order book on hand and not the past uh uh past sales. 42:29 42 minutes, 29 seconds Yeah. So yeah in that case I mean my question is I mean uh would it be normal 42:36 42 minutes, 36 seconds or would it is it industry trend that we would also get since this involves a large amount of specific procurement do 42:44 42 minutes, 44 seconds we also get uh some advance for material purchase from the uh customer or it has 42:52 42 minutes, 52 seconds to be sometimes sometimes we get such sometimes we do not get particularly from companies like 42:58 42 minutes, 58 seconds BHL we do not get but from others uh we get it against uh banger anties but it's 43:05 43 minutes, 5 seconds very very limited amount it's I mean it doesn't fill our uh hunger but you know whatever we get that's good and uh 43:15 43 minutes, 15 seconds you know it's a it's it's it it's the problem of our business or whatever you call that 43:22 43 minutes, 22 seconds okay okay and uh uh just from the I mean uh uh we are manufacturing Um sorry we 43:29 43 minutes, 29 seconds are procuring pipes for fabrication. I mean in terms of uh the feedback or the 43:37 43 minutes, 37 seconds conference calls of the pipe manufacturers they say that it is a very soft market and uh you know they have to 43:44 43 minutes, 44 seconds extend uh a good amount of credit to maintain sales. So other way around since we are consumers I mean are we 43:53 43 minutes, 53 seconds getting that benefit? how do you see the input cost trend and uh the credit terms uh and how does how will it help us in 44:01 44 minutes, 1 second managing one capital so you know as I'm telling you when we are talking to the mills we have to pay them up front they do not give any 44:10 44 minutes, 10 seconds leverage the maximum leverage they give us is the LC which they can extend up to 30 days or something like that but nothing beyond 44:18 44 minutes, 18 seconds that but if we are buying it from traders we do get some credit 30 to 60 is um there's nothing beyond that 44:25 44 minutes, 25 seconds actually but as far as uh the price trend is concerned there is a little bit upward trend right now but you know uh I 44:33 44 minutes, 33 seconds don't know whether you have been attending the previous calls or not uh our stand on that is that you know we get we remain primarily insulated 44:41 44 minutes, 41 seconds because we order the material almost immediately after received of the orders. So you know if we get the new order now let's say if it has a pre if 44:51 44 minutes, 51 seconds if it was previously quoted it it may have a very little impact but it is not going to hurt us in the long run. 44:59 44 minutes, 59 seconds Okay. So just to understand we may the moment we get a order we in the back to back we place a order for our inputs. Uh 45:08 45 minutes, 8 seconds that's right that is but at the time of placing order do we have to make the payment or do we make the payment at the 45:16 45 minutes, 16 seconds time of when we take the delivery which can be you know one against delivery only that is against delivery only but sometimes we have to pay the advance. 45:25 45 minutes, 25 seconds Okay. Okay. And uh on the uh you know on the fabrication side one of your competitors has mentioned they are 45:32 45 minutes, 32 seconds getting a large amount of business from heat exchangers. So is that a addressable segment for us or we are not 45:40 45 minutes, 40 seconds focusing on that at all of no no we we we we are not into that industry. It's a specialized industry. So we we are not into that. Absolutely. 45:49 45 minutes, 49 seconds We we are just uh our core business will remain piping uh manufacturing and piping solutions only. We are not into heat exchangers. 45:59 45 minutes, 59 seconds Okay. So the fabrication uh basically will uh uh address which piping markets only or anything on the any adjacencies 46:09 46 minutes, 9 seconds all all plants you know in any major plant whether it's a power plant or it's a refinery it's a prochemical it's a semiconductor industry it's a nuclear 46:18 46 minutes, 18 seconds plant it's a pharma plant you know you require uh almost 10 to 15% of the capex 46:25 46 minutes, 25 seconds of any of these plants will go towards piping Sir I understood. My point was like in your presentation on slide number 12 you 46:34 46 minutes, 34 seconds have mentioned that know you do heavy fabrication then you do tanks, storage vessels, silos those kind of things. So 46:42 46 minutes, 42 seconds those you know heavy fabrication we are already doing in our subsidiary called 46:48 46 minutes, 48 seconds uh uh fabriccom fabriccom private limited we are doing heavy fabrication. We are 46:56 46 minutes, 56 seconds doing the wind tower uh fabrication you know they that's a separate subsidiary altogether but our primary business 47:04 47 minutes, 4 seconds remains in terms of pipe schools and skids only and pipe fittings pressure vessels whatever we have shown is we are 47:11 47 minutes, 11 seconds making it just for our in-house consumption only for our skid business okay okay just last one on the no power 47:19 47 minutes, 19 seconds side I mean you have uh explained in detail uh just I mean is it possible possible for us to get out of this PPA 47:29 47 minutes, 29 seconds and uh go fully on merchant I mean I know merchant power or sell it through the power exchanges 47:38 47 minutes, 38 seconds viable it's it's not viable because we are into biomass power so where we have lot of fuel costs but you know that's 47:47 47 minutes, 47 seconds viable nowadays for people like wind and solar where there is uh fuel power is involved into that and we have lot many 47:55 47 minutes, 55 seconds other operational expenses where those expenses do not come in picture for solar and wind and hence it's not viable 48:02 48 minutes, 2 seconds you know our viable rate itself is around little above 4 and a half to 5 rupees 48:09 48 minutes, 9 seconds okay okay uh just break even rate I'm saying just break even rate break even okay uh uh that's all from my 48:16 48 minutes, 16 seconds side so you all the best thank you thank you the next question is from the 48:24 48 minutes, 24 seconds line of Sankit Takar an individual investor. Please go ahead. Yeah, thank you for the opportunity sir. 48:32 48 minutes, 32 seconds Uh sir, we initially you know uh uh planned for an fundraising uh for incremental working capital uh uh 48:41 48 minutes, 41 seconds meeting for higher order appetite. Now in terms of sir uh next two years you know uh let's say we are at 1300 cr 48:48 48 minutes, 48 seconds order book in December and incremental 300 to 400 K you mentioned in pipeline. 48:54 48 minutes, 54 seconds So basis closing March we should be around 1300 1400 right but for FI27 to be at let's say 2,000 cr order book 49:02 49 minutes, 2 seconds how we are planning to meet uh you know those funding sir and how that appetite will come no it will it will come from 49:10 49 minutes, 10 seconds our improved cash flow only it will come from our improved cash flow only we do not anticipate any new debt you know if 49:18 49 minutes, 18 seconds all of a sudden let us say orders worth 1,000 crores come or something like that then we may have too. But otherwise if 49:24 49 minutes, 24 seconds the orders come uh progressively throughout the year then you know we won't require anything because of our internal cash approvals only. 49:35 49 minutes, 35 seconds Okay. So immediate let's say uh 50% to increase uh the order book of 50% uh should not be concerned right our balance sheet will allow uh that's it. 49:47 49 minutes, 47 seconds That's it. That's the report. Oh thank you sir. That's it. 49:55 49 minutes, 55 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the 50:03 50 minutes, 3 seconds conference over to Mr. Krishnan Nalid Bansil, promoter, chairman and managing director of D development engineers limited for closing comments. Thank you and over to you sir. 50:15 50 minutes, 15 seconds Uh thank you everyone for joining the call today. Our performance this quarter reinforces our confidence in the business and our strategy and we remain 50:24 50 minutes, 24 seconds focused on execution, capital efficiency and long-term value creation for our stakeholders. Thank you once again. 50:31 50 minutes, 31 seconds Thank you everyone for all your questions. Uh and uh we hope uh uh you are all satisfied with our uh answers 50:40 50 minutes, 40 seconds and if there is anything you know we we are always open for any uh qu uh we are always open for anything. Thank you so much. 50:49 50 minutes, 49 seconds Thank you members of the management. On behalf of the development engineers limited that concludes this conference. 50:55 50 minutes, 55 seconds We thank you for joining us and you may now disconnect your lines. Thank you.