DEE Development Engineers Q2 FY26 results: net profit down 20.0% to ₹17.80 crore, revenue up 39.2%

How did DEE Development Engineers perform in Q2 FY26?

DEE Development Engineers reported consolidated revenue of ₹270 crore for Q2 FY26, up 39.2% from ₹194.02 crore in Q2 FY25 and 20.7% from ₹223.76 crore in Q1 FY26. EBITDA was ₹44.06 crore, compared with ₹29.80 crore a year earlier and ₹35.87 crore in the previous quarter. EBITDA margin was 16.3%, against 15.4% in Q2 FY25 and 16.0% in Q1 FY26.

Consolidated profit before tax was ₹22.34 crore, compared with ₹26.14 crore in Q2 FY25 and ₹15.78 crore in Q1 FY26. Net profit was ₹17.80 crore, compared with ₹22.26 crore a year earlier and ₹13.14 crore in the previous quarter. Basic EPS was ₹2.57, against ₹3.62 in Q2 FY25 and ₹1.91 in Q1 FY26. On a standalone basis, revenue was ₹215.54 crore and PAT was ₹13.29 crore.

What changed in DEE Development Engineers' costs and profit?

Total expenses rose to ₹252.83 crore in Q2 FY26 from ₹183.87 crore in Q2 FY25, an increase of ₹68.96 crore. Cost of materials increased by ₹63.83 crore to ₹127.04 crore, employee cost by ₹6.26 crore to ₹45.16 crore, finance costs by ₹6.61 crore to ₹13.73 crore, depreciation by ₹0.64 crore to ₹13.16 crore and other expenses by ₹14.54 crore to ₹72.60 crore. There was no exceptional item.

Other income fell to ₹5.17 crore from ₹15.98 crore in Q2 FY25, a decline of ₹10.81 crore. Tax expense was ₹4.55 crore, compared with ₹3.87 crore a year earlier. The quarter included no exceptional item, and the filing excerpt did not state a reason for the year-on-year decline in other income.

Against Q1 FY26, cost of materials rose by ₹28.71 crore and other expenses by ₹2.95 crore, while employee cost fell by ₹0.57 crore. Finance costs rose by ₹2.28 crore, depreciation by ₹0.43 crore and tax by ₹1.91 crore; other income increased by ₹1.08 crore. No exceptional item was reported.

How did the first half of FY26 go?

For H1 FY26, consolidated revenue was ₹493.76 crore, up 30.3% from ₹378.99 crore in H1 FY25. Total income was ₹503.02 crore, compared with ₹398.18 crore, while profit before tax rose to ₹38.12 crore from ₹30.53 crore. PAT was ₹30.94 crore versus ₹25.45 crore, and EPS was ₹4.48 versus ₹4.14.

The first-half revenue increase was ₹114.77 crore, total income increased by ₹104.84 crore and profit before tax rose by ₹7.59 crore. PAT increased by ₹5.49 crore, while EPS increased by ₹0.34. The results covered the first half of FY26 and the corresponding first half of FY25.

What do the balance sheet and cash flow show?

Total assets were ₹1,831.57 crore at 30 September 2025, against ₹1,593.50 crore at 31 March 2025. Total equity was ₹837.10 crore, compared with ₹800.57 crore, while borrowings rose to ₹565.33 crore from ₹409.00 crore. Cash and cash equivalents were ₹47.88 crore, against ₹5.89 crore. Inventories were ₹619.12 crore and trade receivables ₹311.89 crore, versus ₹584.96 crore and ₹248.16 crore, respectively; trade payables were ₹198.89 crore versus ₹248.06 crore.

H1 FY26 operating cash flow was ₹3.27 crore, compared with a negative ₹83.76 crore in H1 FY25. Investing cash flow was negative ₹85.32 crore against negative ₹89.85 crore, and financing cash flow was ₹124.03 crore against ₹195.08 crore. Capital expenditure was ₹81.23 crore, compared with ₹75.33 crore.

How has DEE Development Engineers done over the last 7 quarters?

Revenue over the reported quarters was lowest at ₹162.00 crore in Q3 FY25 and highest at ₹286.37 crore in Q4 FY25. It then fell to ₹223.76 crore in Q1 FY26 before rising to ₹270.00 crore in Q2 FY26. The streak data shows that revenue rose year on year in each of the last three quarters.

PAT reached a high of ₹31.51 crore in Q4 FY25 and bottomed at a loss of ₹13.33 crore in Q3 FY25. It recovered to ₹13.14 crore in Q1 FY26 and rose to ₹17.80 crore in Q2 FY26. EBITDA margin was 22.2% in Q4 FY25, 3.5% in Q3 FY25 and 16.3% in Q2 FY26.

Which businesses drove the quarter?

The Piping division reported revenue of ₹246.86 crore and EBIT of ₹34.81 crore, with an EBIT margin of 14.1%. The Power division reported revenue of ₹10.97 crore and EBIT of a loss of ₹1.37 crore, with an EBIT margin of negative 12.5%.

Heavy fabrication reported revenue of ₹14.55 crore and EBIT of ₹4.69 crore, with an EBIT margin of 32.3%. Unallocated revenue was ₹0.43 crore and EBIT was a loss of ₹3.03 crore, with an EBIT margin of negative 705.2%. The provided segment data did not include year-ago revenue, EBIT or growth figures for comparison.

What did the auditors point out?

The auditors’ review report included an emphasis of matter concerning the civil writ petition before the Hon’ble High Court of Punjab and Haryana at Chandigarh over the downward revision of tariff by the Punjab State Electricity Regulatory Commission, with retroactive effect from 1 January 2024. The auditors stated that the matter was sub-judice, that no adjustments had been made to the consolidated financial results and that their conclusion was not modified in respect of this matter.

The report also stated that the consolidated results included assets of ₹3,910.77 lakhs relating to Malwa Power Private Limited. Following expiry of its Power Purchase Agreement on 27 April 2025, management was unable to make an impairment assessment; in the absence of sufficient appropriate audit evidence, the auditors said they were unable to comment on the impairment and possible consequential effects. Except for the possible effects of that observation, nothing came to their attention indicating that the statement did not disclose required information or contained a material misstatement.

What did DEE Development Engineers' management say?

In the earnings call, CFO Sameer Agarwal said the company remained confident of achieving FY26 revenue growth of 40% to 45% over the FY25 base and an operating EBITDA margin of 16% to 18%. Management maintained that guidance and said the proposed equity fund raise had been suspended for the time being, with any future raise to require specific Board approval. The company also guided to an FY27 order-inflow target of about ₹1,800 crore and an April 1, 2026 opening order-book target of ₹1,100–1,250 crore.

Management said the order book was ₹1,308 crore as of 30 September 2025 and that ₹170 crore of new thermal power order was secured during the quarter. It said Anjar’s process-piping capacity had doubled to 30,000 metric tons per annum and that the 7,000 MT seamless pipeline was expected to commence commercial production by January 2026. The call identified the revised biomass-power tariff as affecting revenue and profitability margins, while the working-capital cycle remained 243 days, which management described as inherent to the business.

How did DEE Development Engineers shares react?

The stock fell 0.6% five minutes after the filing appeared, 3.6% after 15 minutes and 4.0% after 30 minutes. On the reaction day, it fell 5.2% from its pre-results close; by the next day’s close, it was down 9.7% from that close, and by five sessions, it was down 10.5%.