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Dee Development Eng hits the floor after reporting net loss of Rs 13 crore in Q3

17-Feb-25 17:10 Hrs IST

Revenue from operations fell 22.7% year on year (YoY) to Rs 162 crore in the quarter ended 31 December 2024.

The company reported a pre-tax loss of Rs 17.48 crore in Q3 FY25, compared to a profit before tax of Rs 10.76 crore reported in Q3 FY24.

Total expenses decreased 11.4% YoY to Rs 178.59 crore in the December 2024 quarter. Cost material consumed stood at Rs 68.20 crore (down 29.79% YoY), employee benefit expenses were at Rs 41.65 crore (up 21% YoY) during the period under review.

The company reported an 81.1% decline in EBITDA to Rs 5.7 crore in Q3 FY25, down from Rs 29.9 crore recorded in Q3 FY24. The EBITDA margin reduced to 3.5% compared to 14.3% posted in the previous corresponding quarter.

On segmental front, revenue from Piping division stood at Rs 130.43 crore (down 27.06% YoY), revenue from Power division stood at Rs 21.02 crore (down 1.40% YoY), revenue from ) Heavy fabrication stood at Rs 11.91 crore (down 4.33% YoY), during the quarter.

On nine-month basis, the company's consolidated net profit fell 15.5% to Rs 12.12 crore on 0.8% increase in revenue to Rs 540.99 crore in 9M FY25 over 9M FY24.

Krishan Lalit Bansal, chairman & managing director of Dee Development Engineers (DDEL), said 'We acknowledge that the financial performance for the recent quarter has been weak, with operating income decreasing by 22.7% YoY to Rs 1,620 million (Mn). However, our order book remains strong, reaching Rs 13,937 Mn as of 31 December 2024, compared to Rs 11,921 Mn as of 30 September 2024.

The weak performance this quarter can be attributed to the underutilization of capacity at our Palwal facility, which had been allocated for a significant order from one of India's leading Oil & Gas companies. This Rs 1,390 Mn project involves the establishment of India's first propane dehydrogenation (PDH) plant. As this is the first project of its kind in the country, there has been a six-month delay in obtaining drawings and material approvals, impacting the overall execution timeline. While the order was awarded in October 2023, it was initially expected to be completed by 31, March 2025. Additionally, another international order, valued over Rs 510 Mn, faced a delay due to late revisions in material specifications by the customer, resulting in execution being pushed to Q4'FY25 instead of Q3'FY25.

As previously committed, we are pleased to report that we successfully expanded capacity at our New Anjar Facility II by 9,000 MT per annum in end January 2025, which strengthens our growth prospects moving forward. Furthermore, we remain on track to increase capacity by an additional 15,000 MT per annum by October 2025.

We are also pleased to announce that the setup of our high-wall seamless thickness pipe plant is progressing as planned. We remain on schedule to commence commercial production by January 2026.

We continue to optimize our operations and seize emerging market opportunities. Our focus remains on maintaining capital discipline, investing in new technologies, and upholding sustainable business practices. Given the prevailing market uncertainties, we will closely monitor economic trends and adjust our strategy to drive long-term value for all stakeholders.

We appreciate your continued trust and support, and we look forward to achieving new milestones together.'

Dee Development Engineers (DDEL) is an engineering company providing specialized process piping solutions for industries such as oil and gas, power (including nuclear), chemicals and other process industries through engineering, procurement and manufacturing.