DEE Development Engineers Limited (DEEDEV) Q1 2027 Earnings Call Transcript

Good morning, everyone. Good day and a very warm welcome to the Q1FI27 earnings conference call of D Development Engineers Limited. From the senior management, we have with us today Mr. Krishan Lalit Bansal, Promoter Chairman and Managing Director, and Mr. Bram 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 start and zero on your touch-tone phone. Please note that this conference is being recorded. Aina, and the conference over to Mr. Anand Venugopal from AdFact SPR. Thank you, and over to you, Mr. Anand.

Thank you, Avira. Good afternoon, everyone. We welcome you to the Q1 FY 2027 Earnings Call of the Development Engineers Limited. Before we begin the earnings call, I would like to mention that some of these statements made in today's call might be forward-looking in nature, and hence it may involve risk and uncertainty. 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 will ensure the call is reconnected the soonest. I will now hand over the call to Mr. Kishan Bansal sir to share his views. Over to you Bansal sir.

Thank you Anand. Thank you so much. Good afternoon, 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. FY26 was the year in which we completed our major growth CAPEX cycle with the full operationalization of the Anjar pie fabrication facility and the commissioning of our seamless pie plant. Q1 FY27 is the first quarter in which the early results of debt investments are visible in our operating performance. Starting with the financials, revenue from operations for Q1 FY27 was 294.5 crores, up 31.6% year-on-year, driven by continued execution momentum in the piping segment, supported by supplies to the power and oil and gas sector. Operating a bidda for the quarter was 49.7 crore with a margin of 16.9% compared with 16% in Q1 of FY26, and it is up by 38.7% year-on-year. Profit after tax for the quarter. Year on year. 25 rows of dispatches scheduled for Q1. Thank you. We serve marquee customers across the power, oil and gas, and process industries, both in India and in our export markets, and the full operationalization of the Anjar facility has meaningfully expanded our ability to execute larger and complex projects. With the seamless pipeline now commissioned, We are also capturing a greater share of value in-house. A notable highlight during the quarter was the receipt of a domestic purchase order of three. Thank you. Indian PSU refiners. On the demand environment, the policy and investment backdrop remains firmly supportive. India's capex cycle continues to build. This trend is mirrored in our overseas market, a meaningful part of our core business where we are seeing a clear pickup across energy. These domestic and global tailwinds create a compelling multi-year operation. Welcome to the Bahamas Pilot Plant, which we commissioned during Q1 of FY27. Thank you. We are targeting combined revenue of around 80 crores from the known core segment supported by the revised Malwa tariff of 5.44 per kilowatt hour, flowing in for the full year, contribution from the parallel brand as we ramp up utilization, and the restructuring initiatives we have been... Since the pallet plant was commissioned midway to Q1-FY27, the current quarter reflects only a partial contribution from the pallet operations. From Q2 onwards, we will have the benefit of a near full quarter of pallet production, and alongside that, we are working on ramping up utilization over the coming quarters and securing long-term off-tech tie-ups with thermal power producers. We are working on producing these pellets. Thank you. LPG, LNG, furnace oil, etc. Welcome to the capital structure. As many of you are aware, the 300 crore preferential issue that was approved by shareholders at the AGM. There will be trading approvals from BSE and MSE. We are very grateful for the confidence they have placed in the company. On the net proceeds of approximately 293 crores, around 225 crores is earmarked for repayment or prepayment of borrowings with a balance towards general. This is expected to bring down our debt levels materially, reduce financial costs considerably on a run rate basis, and improve return ratios going forward. Equally important, it strengthens our balance sheet and improves our leverage headroom at a time when we are seeing strong tailwinds across our core and markets, which give us the flexibility to pursue. We have been discussing without setting. This shall also help in our vision for establishing a facility to cater to nuclear. FY27 is on the asset terms. Strong order book of 2428 pros as of 30th. Which gives us strong revenue visibility. Overall demand, visibility across our core and markets, particularly power, oil and gas, and process industries in India and overseas. I would like to open the floor for questions and answers and look forward to...

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Aniroth Agarwal from ValueQuest. Please go ahead.

Yeah, thank you for the opportunity and congratulations on the results. A few questions from my side, sir. First one was on the HRSG and JT piping business. So if you could just give an update in terms of how has the progress been with GE on the HRSG orders, as well as last call you had mentioned on Siemens and some discussions with them. So if you could just update on both of those.

Thank you so much. We are absolutely on track. We are continuing to receive GT orders from G. However, HRSG order from G is yet to come, although we have an agreement with them that they will award us around 15 to 16 units in this particular unit. We do expect that there may be some delay in that. However, it is not going to affect in any way our... We are in the top nine in this particular year because, you know, instead of GE, we are getting a lot more traction from other customers like Nutella Richland, you know, for which they have again awarded us many fresh orders which are yet to be declared. And, you know, with the incoming of those fresh orders, our silent facility is now practically 100% booked for the coming three years. And as far as... What was your next question, sorry?

Sir, on Siemens, if you could provide an update.

Yes, Siemens, we already have agreed, we have already signed a sort of, you know, understanding or an M.O.M. with them, that from next year onwards, you know, we shall be getting continuous business with them. So far, GTP, I think. Exactly. But it is, you know, starting with 10 units in the coming year, then 15 units in the next year, and maybe around 25 or 30 units in the third year. So that is also on track. One of their teams is coming to our NJAR facility in the third week of Rust itself. Thank you, too.

And broadly, what will be the quantum of the business from Siemens that we should expect for next year? These 10 units of GT piping broadly, what quantum would that be? Exactly.

I may not be able to tell you exactly, but, you know, each unit for GT piping, you may consider it to be around 1 to 1.5 million euros.

Okay, got it. That is good, sir. And secondly, sir, on the neuter progress that you mentioned, so Thailand, sir, at peak capacity, what sort of revenues can we expect from that facility?

Sir, as we have been telling, you know, last year we did around 130 crores, and the intention is that we have to keep that unit busy and target to achieve anything between 170 to 200 crores.

Sir, another question was on the overall cost base for this quarter. So, we see that the absolute employee cost and other expenses are actually lower than last few quarters despite revenue growth picking up. So, how should one think about that going ahead? So, even as you scale up execution, should we expect that cost base will not move up too much and there is a lot of operating leverage that should play out in next few quarters?

This is what we have been telling in all my calls that, you know, we are likely to get a lot of operational leverage because of the mix in the business and the operationalization of the Anjar facility. You know, I have been telling earlier also that there has been a considerable... There was a considerable reduction in the manpower outcome, and we do not expect any major recruitment. The trend will continue as it is, and by the end of the year, when, you know, the UK... of our top line.

Thank you, sir. On one of the interviews, I think a couple of days back, you mentioned it up.

Ms. Chakarwal, may we request you return to the question queue for a follow-up question? Because we have a lot of participants waiting for the question.

Sure, sure. Thank you. I'll come back.

Thank you. The next question is from the line of Pranay Roop Chatterjee from Burman Capital Management. Please go ahead.

Yes, please.

Thank you for the opportunity. My first question is on domestic power. Is there any movement in terms of, because I'm sure Bale had a production plan for boiler turbine generators in FY27, and basically whatever plan they had, they had to give out the piping orders. Is there any change in, because last time I think we discussed that they were moving quite slowly, is there any change in that? And should we expect those orders to start coming in anytime soon?

So the speed is not as expected, but definitely, you know, they are moving with their own pace. You know, last quarter also, we got around 200 close worth of order. And two more tenders are in the, you know, the preparation stage. Those tenders should be in the market, maybe in this quarter itself, and, you know, they may get finalized in the next quarter. But, you know, they are slightly slower than our expectations. However, you know, apart from just piping jobs, we are getting a lot of traction from them. You know, their headers, their vessels, businesses there, and, you know, similar such things are coming from them, for which, you know, we are equally, you know, happy to get those orders also, because they are also very highly value-added products. And, you know, apart from BHL, I will say that, you know, we are not just depending upon BHL. L&D has awarded all the orders which they had offloaded till now, and they are discussing some more orders with us. You know, we are likely to get finalized within this quarter. These are the opportunities we are discussing some We have absolutely no worries. Thank you. The order info will reduce or it will fall down.

Got it. So, my second question, I'll probably Good morning, everyone. I'll probably combine two small questions together because I won't get another opportunity. First part, 2,000 crore order inflow guidance, sir, is that still applicable in light of a couple of these delays that are happening? And number two, I noted that the EBIT of the PPA division went to negative again after it was, I think, 1 crore positive last quarter, and it is about 1 crore negative this quarter, which is like a 2 crore negative swing. So, is there any specific reason for that? So, these two questions. 2,000 crore inflow guidance and what happened quarter-on-quarter in the EBIT of PPA? A bit of? PPA division, the power, power, PPA division, power, power division.

Okay, okay, power division, okay. So, your first question, definitely, yes, it may increase also, but your first question is absolutely, online, we are likely to get more than 2,000 worth of info in this particular year. And as far as your question on habit is concerned, you know, frankly, we... Commissioned our pallet plant a bit earlier. So, you know, to now the fuel which was available with us, we could run either the power plant or the pallet plant. So, you know, our focus was more on now pallet plant just to establish the business and just to be sure that we shall be able to do that. But now, from... We are able to run fully the power plant as well as the pellet plant. So, you know, then this scenario will again change.

Understood, sir. All the best. Thank you.

Thank you. The next question is from the line of Ankit Soni from Mere Asset. Please go ahead.

Yeah, hi, sir. I'm Audible. So, you mentioned that there's a 100% capacity or maybe utilization into your Thailand facility, and we know that our capex cycle is broadly ended. So, any plans around in there for Thailand capacity expansion around?

No, sir. We are not planning any capex or capacity expansion in Thailand. You know, as I've been telling earlier also, that's our sort of a showcase unit. And, you know, we like to, we will be very happy if we continue to do the present business. But, you know, the expectation is that we should be moving very close to 170 to 200 crores in the coming time.

Okay. And just to understand, this order from Siemens and etc. will be going out from the Anjar facility or will be from, like this will be from Anjar facility, right?

Siemens, you know, they are talking to us from both the facilities. So, you know, for Parval, they have already signed the memorandum, as I told some days back, and in third week of August, they are coming to formally clear our Anjar unit also. And then, you know, they are having so much business that, you know, they will be considering both, you know, they will be considering our Anjar facility for their modular piping work.

Just a last question. What would be the capacity utilization at Anghar facility, and what are the ramp-up plans around?

Sir, you know, whatever we have planned in this particular year, we shall be doing it. But, you know, in that also, we should be reaching at around, maybe around 62-65% of our available capacities. And our plan is that by the end of the next year, we should be utilizing almost 100% of the available capacity at Anjar. Sure. All the best. Thank you.

The next question is from the line of Aditya Sahu from HDFC Securities Limited. Please go ahead.

Hi, sir. Thanks a lot for the opportunity. Hi, sir. I hope I'm audible. Sure, sir. I think two of my questions were already answered, just one of which was pending. This was with regards to the revenue split, because I understand in the presentation you have mentioned that you are targeting some... 15-odd-100 crores of revenue for FY27, right? If I have to look at the revenue split that we have, what sort of revenue split are you looking at in the coming quarters, considering that, you know, we have seen the ramp-up in the windmill, power execution, and the structure of fabrication part? So what sort of revenue split one should look at going forward?

So, I mean, you know, if I have understood your question correctly, you know, what we are planning is that we should be doing anything between 1150 to 1250 crores from our piping segment, and the rest will come from. This is what your question is, if it's something different, then please.

So, 1250 is from the pipings segment of the 1,700 crores, and the balance is from the other segment, including the 1,200 crores.

That's right.

Oh, okay. And on the margin guidance, if you can provide some sort of, what sort of margins are you looking at?

As we have told earlier, you know, we remain fully committed. The top line of 1,500 posts. A bit of a margin of more than 19%, 100% without any doubt in that.

Okay, 19%, 19% a bit more.

Yeah, yeah. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Rike and Gopani from Capri Gobel. Please go ahead.

Hi, sir. Thank you so much for the opportunity, and congratulations on a good set of numbers. Sir, just I have one question. I'm trying to understand more in terms of the inflow outlook for the current year. What we are sort of in a way indicating that this could be, for the remainder of the year also, we could see more than 2,000 crores of inflows in this year. If you could broadly outline which all, you know, sectors will see what kind of inflow basis, the kind of bids that you expect to win in the next nine months.

Sir, we have a very healthy, I would say, pipeline. I mean, it is equally distributed among us, oil and gas and this power sector jobs. Plus, you know, we are targeting very seriously, as I have been telling earlier also, that some data center jobs will also come up. So, you know, I won't be able to tell you exactly from which. The pipeline is quite strong, and we do expect that there will be an addition of at least 2,000 crores of fresh orders. I'm saying total inflow. Actually, the order inflow will be more. What I'm saying is we have already got around 700 cores worth of orders in this year already, and we are saying that minimum will be around 1,300, but it can extend to around 1,800 also. For the remainder.

Any visibility or any further progress on the fertilizer-related projects, anything that we see in the near term or next?

Sir, we do see it because the Government of India has announced some new projects, particularly in Assam. We are eyeing that project very seriously, as a matter of fact. But as of now, if you tell, there is nothing much available. We had been discussing with one of the foreign customers, but that foreign customer has awarded to some local person in that country only. So, you know, that opportunity has been missed. But, you know, still, I mean, there are many more opportunities which are likely to come. But, you know, that will come maybe after, maybe in the next year or something like that.

Nothing in this year. from NeverShare. Please go ahead.

Yeah, am I audible? You showed a lot of confidence in order inflow booking for the year, but my question is regarding this thermal, you know, as a medium-term opportunity where we are seeing that 80 gigawatt would be awarded until 2031, but there are states like Rajasthan, you know, in June canceled a 3.2 gigawatt order because they are saying that the power generation is at a good level because of renewables adding to it. So what's your overall... on this because, you know, we are kind of shifting our order book towards more power projects. So, and they're basically thermal power plants.

I'm not saying that we are shifting our entire focus on this fossil fuel boilers. You know, our focus is equally large on... In addition to that, we are also eyeing new sectors like, you know, data centers we are eyeing. We have a very clear vision that we have to have a nuclear sector in our fold in the next two years' time that I have been telling in all of my meetings, and we are quite near to meeting that target, to, you know, meeting our sort of partner through whom we shall be working on this nuclear sector. You know, we are just not dependent upon fossil fuel boilers, but at the same time, I will say that if PSUs are not putting up the plant, so let us say I am saying that if NTP is not putting up the plant, we are still not worried. The reason for that is that a lot of private players like JSW are putting up their plant, this Moservere is putting up a plant, then, you know, this. Bajai Hindustan Group is putting up their own, you know, 800 megawatt power plant, and I still feel there is an endless demand, and, you know, the capacity which we have, we won't be able to cater to all such needs even now also. So, as said earlier, till 2030, we have absolutely no concern on booking the orders in this particular sector.

Okay, okay. That is good to know, sir. And so, secondly, basically, we are being adamant on the fact that you will achieve a revenue of about 1,500 crore in this year. But let's say in the June quarter, where we have, you know, a spillover of 25-odd crore rupees revenue, and still we have grown YOY 32% kind of revenue goal. So, and we are, like, confident on the execution also. So, is it possible that we'll, you know, exceed this guidance?

The plan is that only. The plan is for that only, sir, to exceed that guidance. And again, I am saying that the 1500 cores, which we are saying, is the bare minimum numbers, which must be on our top-line balance sheet. So that's what it is. And, you know, again, reiterating that Q1 is the weakest quarter, although that has been the best this year, but still, you know, Q1 is the weakest quarter, and it's 10, you know. Q2, Q3, and the best quarter is always the Q4.

Got it. And sir, one more question on the gross margin profile. Basically, it has been very volatile, around 63% in the bio-wise when we compare Q1-FI 26 to Q1-FI 27. So, what could be the reasons here, and how should we look at it? Because, as you mentioned in previous phone calls also, that from this island facility, we just do the job work part and not material plus the job work. So, I mean, this... And how should we look at the cross-margin profile going forward with more and more power projects getting executed?

Sir, the cross-margin may be falling slightly because, you know, the material cost... Thank you.

Good one. And one last question is on the data center. You have been mentioning about the data center.

Sorry to interrupt. Mr. Chandresh, may we request you to return to the question queue for a follow-up question? Next question is from the line of Akash Rawal from Sangvi Family Office. Please go ahead.

Hello, sir. Thank you for the opportunity. Sir, I have a question regarding the new opportunities which we are going to tap, which is, of course, HRISG data center and the nuclear. So, I just wanted to understand how the piping requirements changes, what are the customer approval process in this, and how are you seeing going forward that it can become a reasonable part of our order book?

Sir, again, I will say that for nuclear, you have to have a lot many approvals for the same. Some of the approvals are already in place with us. Some of the approvals, we are working on that. And, you know, majorly, I will say that, you know, we are looking for a partner who shall help us to do that because we shall need a lot of pre-qualification for those jobs for which our partner will bring. We're bringing that to do the export jobs. However, for Indian jobs, we are well qualified. But since Indian jobs are right now moving slowly, but in coming years, they will pick up. So, you know, we are expecting huge potential from nuclear sector. You know, on our own stance, if it is in India, if we have to cater to the export market, we definitely need a sort of a partner for which, you know, as I told earlier, we are in an advanced stage of discussions and target is to... Close the discussion and formalize the agreement in Q2 under any circumstances. That's the plan. It may spill over for one month, two months, this way, that way, but that's what the plan is. However, the piping remains the same. The material compositions vary from sector to sector, and the quality requirements and the demand of the customer and the mix of the material varies from. Nuclear sector, the value addition is much, much more than power sector. In data center, it may be less than what we are doing at present. And, you know, it varies. Again, I will say that it varies from sector.

Regarding the Thailand facilities, since the capacity is booked for the next three years, any plans on expansion over there since there is a lot of demand regarding it?

No, you know, we are not planning any expansion in our Thailand facilities. That's our, again, I will tell you, it's our showcase unit sort of thing. So, you know, whatever expansion or whatever new thing we have to do, that plan is only to do it in India.

Okay, sir. And, sir, any guidance on the working capital, but since the order book is, of course, 2,000 crores and above, so how do we view the working capital and the debt of the business going forward?

Sir, debt is going to come down only, you know, after the introduction of this preferential issue of 300 crores. We have 293 crores net amount available with us, out of which 224, 5 crores has already been paid. We are working capital limits and the remaining 64 crores or whatever it is. That is for GCP purpose. So the net debt, you know, as on quarter one FY27 closing was around 718 crores, while it was 733 crores on FY25-26 closing. So we do expect that, you know, with the introduction of this, the net debt by close of this FY27. Probably more than 400, 425. And there is no plan, absolutely no plan for any new debt in this particular year. And if some requirement comes, that is going to be very, very small. It will be sort of an immaterial thing. Or, you know, we shall be doing it from GCP.

Ryan of Vineet from Toro Wealth Managers. Please go ahead.

And more about the in-house manufacturing of P91 and P92 pipes that we are doing at Anzhar facility. Sir, earlier we used to import these pipes, right? So, yeah, first of all, if you can explain to me what percentage of this pipe form of a HRSG solution. And also, when we used to import, what was the percentage of cost versus now when we are making it in-house. Seeing that we are doing.

Let me tell you, you know, the pipes which we are going to manufacture in our facility, they are primarily meant for core-fired boilers for 800 MW, 650 MW and above because they are for high wall thickness and for P92. And in HPSC business, you don't require those high-thicknesses pipes. So, you know, we shall be manufacturing these pipes basically for core-fired. Boiler business only, and we do expect that we should be earning at least around 20% of it down on this seamless five-month factoring also, which will help us in our bottom line.

Does this mean that this is not used for the HRSG solution?

Very lesser because those thicknesses are less. So, you know, there our price competitiveness will not come. It will be better to buy it from the market or, you know, the people who are having regular seamless pipe plants, you know, this is a very, very special plant, which is meant only for very high wall and very large diameter pipes. So, you know, and that requirement is normally not there in HRSG business.

Understood, sir. And since we are talking with Siemens as well, probably next year we are targeting 100% utilization also. So what percentage of the utilization of bonsai plant would be for captive consumption versus for outright sale that we are planning?

Sir, our plan is, our plan is 55.

These are all my questions. Thank you.

On the line of Kaushal Sharma from Equinox Capital Venture, Private Limited. Please go ahead.

Yes, sir. Very good afternoon. Am I audible? Yes, my question is on your order book side. Like within your power segment order book, INR 399 crore has of September 2000 purchased inside a total order book that has since grown to 24 to 8 crores. Could you break down in rupees or in tonnage how much is SRFG and combined cycle piping? My guest, Edwine Wiggins.

The HRSG business for India. Coal-fired boilers business.

And, sir, how much is conventional coal super... How much is waste, heat, recovery? And within your stated financial 27 inflow guidance of 2,000 crore at roughly 60% power, what share do you expect to be SRSG export work versus Indian gold?

So, you know, historically we have been doing more than 50% and this year also we shall be doing almost around 50% or maybe a little less than 50% because a lot of domestic work is there for power sector. So, but, you know, broadly speaking, you still can assume that it will be 50% export and 50%.

Sorry to interrupt, Mr. Sharma. May we request you to turn to the question queue for a follow-up question? Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.

Thanks for the opportunity and congratulations for a decent start to the year. First question is on our power segment. So, we have recently seen Adani and JW announcing quite a few new projects on the thermal power side and L&D also winning orders for the boilers for some of the projects. So, if you can talk about our order pipeline on that side, as well as, you know, whether these orders will be on job work basis or with the raw material procurement, if you can talk about a bit more on our order pipeline for this year and how should we look at this segment.

It's very difficult to highlight or very difficult to spell out the strategy of these big players. Sometimes they will go with material, sometimes they will go with job work basis. But what we are expecting is that particularly from DHL and people like JSW, we should be getting the jobs with material only now onwards. We were with L&T and Adani. It is just my... The pipeline is huge, sir. The order pipeline is huge. Meeting 1,500 crores this year target and growing by 20% CAGR is, I will say that now it's very, very easy. We are targeting that we should be reaching 2,500 crores, although we have said FY30, but we are trying that it should happen in FY29 only. But for that, we do not see any concern as far as the order inflows are concerned. Plenty of orders are in the market. Plenty of people are looking for our services now in the domestic as well as, you know, in the...

The first question was on the seamless pipe segment as well as on the GT piping. So first on the seamless pipe, you know, if you can give an update, you know, how is the ordering flow and what kind of ramp up are we looking in this financial year. And on GT piping, on Siemens, you told that we'll be getting, you know, an order of 10 units from them for next financial year with cost of around 1.5 million. And we also do GT piping for GE. So... What I understand is GT is a higher margin segment for us. So how should we look at GT execution for this financial year and next financial year?

So, you know, we are executing a lot of many GTO piping orders from GE, you know, exact quantum, I really do not have that. And this year, also, we have done some work for Siemens. I mean, that's only, I mean, some part of the job. But, you know, from next year onwards, we shall be doing, you know, maybe as bigger volumes as we are doing for GTO piping from Siemens also from the coming year onwards. And, you know, as you have said rightly, it's comparatively much higher. Margin business and the efforts... But however, it's very, very, you know, sort of specialized or critical sort of manufacturing. It takes a lot of time, but, you know, definitely there are...

On Seamless, if you can give an update, sir. Sorry to interrupt, Mr. Kusma. Actually, that was part of the question I'd asked.

As far as Seamless is concerned, sir, we already have an independent order of around 68 crores from L&T. While, you know, we got last month, last quarter, which we got was order from BHL for about 200 crores. In that, you know, we are expecting that we shall be using pipes from our unit for worth around, maybe around 80 to 90 crores from there.

Any other things in pipelines, anything else?

I mean, you know, two very big tenders are due for opening. We are expecting a lot of business from them also, you know, and further, as I said, you know, we are discussing with many customers like ASW, Thermax, and all those people, you know, they shall be buying the piping with material from us, you know, we shall be using in all those projects.

Thank you, Michelle.

Thank you. The next question is from the line of Tuanil Desaiz from Turtle Capital. Please go ahead.

Hi. Good afternoon, everyone. So, my first question is, so, that GEOI, you said that we have not yet received the order. Maybe it is kind of, you know, delayed a bit in terms of the PO coming through. So, how should we think about, you know, next year, because, you know, GE has a recurring requirement, and if they not place the PO for this year, will it have some impact on the, you know, for next year, and hence, how should we think about that part? You know, again, I will say the same thing.

Let us say, for the time being, you consider it as a worst case that they do not give further any order. It's okay. It doesn't matter. We are already booked for more than one and a half years even now. And we are expecting another inflow for almost 1,800 to 2,000 crores in this remaining part of the year. So, you know, we are absolutely not worried on that. We are going to have Siemens in our city. We are going to have no terrorics, and we are already having other players. Like, you know, Mitsushi, Mitsushi power industry is also likely to be coming into our city very, very, very soon. So, we are, again, I will say. We are not worried on the ordering flows. However, you know, even GE also has to come because they have to honor their commitment. They cannot just... We are already in discussion with them. Our people are going to meet them on 14th of September to ensure that things remain on track. So this is what our plan is.

And the second question, I think our, you know, order book, which is outstanding, is around 2400 crores. Now, you know, we are guiding for 1500 plus, but given the lead times that we typically have for power and oil and gas, you know, if we have to meet those lead times. Thank you.

You know, in our business, it is just not dependent upon receipt of order. It is dependent on so many other factors also, you know, like release of drawings, release of information for us to order the material and all those things. So, you know, there are many projects. You know, like GE project is there. In the order book, it is appearing as 380 growth or something like that, but still, we do not have any inputs on that. So, like this, a few more orders may be there, you know, for which we just cannot do anything. But what I will again like to write is that, you know, whatever 1,500 full business we are targeting for that, we have clear inputs. And as a matter of fact, you know, we are thinking that... You know, if the orders get a little bit delayed, that is good for us. So, this is what is happening now.

And for last question on the...

Sorry to interrupt, Mr. Desai. May we request you return to the question queue for a follow-up question? Thank you. The next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.

Hello, sir. Just two questions from my staff. First is, I want you to understand what is our working capital cycle when it comes to quarter one, FY27? Because I actually see a slight increase in interest cost as well. So, just wanted to understand from that perspective.

Sir, as far as working capital cycle is concerned, If you compare Q1-FY26 numbers and Q1-FY27 numbers, you know, the earlier inventory days were 243, while in Q1-FY27, they are 174. Debted days were in 99 earlier, and now it's 123. It is a slightly increase in the debtors days. The credit rates have fallen drastically from 66. Thank you. At the same time, with our bigger vendors also, you know, our intention is that we pay them on cash basis or with minimum credit, and, you know, we get a lot of leverage in terms of our purchase prices, you know, which reflects directly on our P&L. So, this is what our focus is. So, you know, what we are concentrating majorly is that, you know, debtors there we have to reduce, which we are, you know, trying to depend more on customer bill discounting, which is happening. But, you know, last few, I mean, it was a little less, but, you know, as the turnover will increase, we should be able to ramp up that also. And in 20 days, it's falling considerably. And we do expect that, you know, maybe by end of Q2 or maybe within Q2 also, it should be going somewhere around 160 days or 150 days also. It's possible. And our aim is that this.

So, on this back, You know, from 38, 36 to 20 now. So, and even on the quarterly basis, we see a lot of fluctuation when it comes to tax rate. So, what would we ask, you know, average tax rate that we should consider if we have to, you know, say, model the numbers?

Thank you.

So, we actually, for our industry, we are providing the tax at the rate of 25.17%.

Hello. Hello, yeah, yeah. But also, basically, last year, our average tax rate was around 20%, and a year before that was 21%, and even if I see on a quarterly basis, there's a lot of fluctuation when it comes through the tax rate. So, my question was on that line.

Consolidation includes the Thailand plant as well. So combining the subsidiary revenue and the profit part, that tax will definitely fluctuate quarter on quarter. But in terms of absolute percentage, it varies between 20 to 21 percent.

Okay, okay.

In standalone, it will be around 25 to 0.17%.

Okay.

Yeah. Okay.

Yeah, got it. Got it. That's all.

The next question is from the line of Virak Shah from Elios Financial Services. Please go ahead. Yes, Mr. Shah, you may go ahead with a question. Yeah, so I just wanted to ask that what is the peak revenue potential for the Anjar facility and by which year we can achieve that?

1,500. And by 28-29, we should be able to do it.

is from the line of Nishant Bhatt from Equity Works Limited. Please go ahead.

Yeah, am I audible?

Yes, please go ahead.

Yeah. So, my first question was with the reconstruction activity. Sorry to interrupt.

Mr. Bhatt, may we request you use a microphone while asking a question?

I am actually using a microphone. Is it still not audible?

Please go ahead now.

So, with the reconstruction activity beginning across the Gulf, have you started receiving any RFQs from, you know, refineries or petrochem industries over there? Do you expect any order inflow from that part of the business?

Sir, not yet. As far as we are concerned directly, however, you know, people have started talking to their original manufacturers who have supplied the original plants. So, people have already started getting those inquiries, and, you know, our number will never come directly. Our number will come only through these OEMs only. You know, once the OEMs get the work awarded, then, you know, we shall be in the queue for those works. But, you know, it has, again, a huge potential, but, you know, still, like I cannot say, and we have not, you know, accounted for these numbers in our projections even. Till next five years also. However, if anything comes, it will be sort of an extra thing.

Other question is, sir, what is the current asset turnover of the business and the utilization of Anjar plants as of now?

You know, as I said, presently we are using our Anjar facility to around 50% or something like that. So, next year we think that we should be touching almost 70-75% or maybe a little higher also. And the asset term right now is for, you are talking of Anjar or at group level?

Group level.

Basically, you know, it is slightly lower. I mean, exact numbers, Bramji, can you tell?

Yeah, it is 1.39. It was slightly higher. Yeah, compared to Q4, it was 1.33. Now it is 1.39.

Got it. Got it. And another one last question from my side was, see, one thing which I usually Really, your gross margin tends to... 60 to 65 percent have been noticing this pattern. From the four quarters, the gross margins have started to get depressed. Is this due to the malwa power issue going on, or is there some other factor which is currently, you know, depressing the gross margins, and it may vary to the normalized levels sometime later?

Sir, the gross margin, as I told you earlier, it will be a little lesser this year because, you know, the material cost is comparatively much higher because we are doing this power sector jobs. However, the conversion cost is less. So, you know, what we are saying is that our EBITDA, whatever we have projected will remain this, what we are saying, it will be above 19% only. And as you have rightly said, it has some impact from the Malwa also. But major impact is from our piping segment because we are doing a lot of many jobs with material, which earlier used to be, I mean, a lot of business used to be from job work basis where there was no material impact. Material cost was not coming and the gross margin used to be a little higher. And fluctuation is also happening because of that reason only because the percentage of job work and with material order is changing. That is one part. Second part is the material cost is... will be increasing because of the power sector.

Got it. But this will, like, the EBITDA level will be still doing better, as you mentioned.

Yeah, this is what, you know, we have projected 19%, and it will be 19% only, plus only.

Okay, okay. So, got it. That's also my sense. Thank you, and best of luck.

Thank you, everyone. Thank you all for taking the time to join us 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 at Factor PR. Thank you so much. Once again, thank you.

On behalf of D Development Engineers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.