Engineering Giant Bags Rs 27 Crore Order Amid Profit Slump - Can New Orders Turn It Around?
Company secures a major contract while battling declining profits and project delays
DEE Development Engineers Limited has secured a Letter of Intent from a new customer for manufacturing and supplying fittings for a thermal power plant. However, due to commercial reasons, the customer's name has not been disclosed. The contract is worth approximately Rs 27 crore and is expected to be completed by November 2025.
Decline in Quarterly Financial Performance
For Q3 FY25, the company reported a 22.7 per cent decline in operating income, which stood at Rs 1,620 million. Operating EBITDA dropped by 81.1 per cent year-on-year to Rs 57 million, reducing the EBITDA margin to 3.5 per cent from 14.3 per cent in the previous year. Profit after tax fell sharply by 247.6 per cent, recording a loss of Rs 133 million.
Order Execution Delays Impacting Business
The weak performance is due to underutilization at the Palwal facility. A significant Rs 1,390 million order for India’s first Propane Dehydrogenation (PDH) plant faced a six-month delay in obtaining necessary approvals, affecting execution timelines. Additionally, an international order worth over Rs 510 million was pushed to Q4 FY25 due to material specification changes requested by the customer.
Strong Order Book and Capacity Expansion
Despite short-term challenges, the company’s order book remains strong at Rs 13,937 million as of December 31, 2024, up from Rs 11,921 million in the previous quarter. The company successfully expanded capacity at its New Anjar Facility II by 9,000 MT per annum in January 2025 and plans an additional expansion of 15,000 MT per annum by October 2025.
Future Outlook
The company remains committed to operational efficiency, investment in new technology, and disciplined capital management. It is on track to start commercial production at its high-wall seamless thickness pipe plant by January 2026. Despite market uncertainties, the company aims to achieve long-term growth and deliver value to stakeholders.
Disclaimer: The article is for informational purposes only and not investment advice.