Dee Development Engineers had a disappointing Q3-FY25 as their revenue took a hit due to delays in booking revenue from India’s first Propane Dehydrogenation (PDH) plant project. Another international order worth over ₹51 crore also faced delays due to material specification revisions by the customer, pushing execution to Q4-FY25 instead of Q3-FY25. This led to a decrease in operating profit margin (OPM) to 3.5 per cent from 14.5 per cent in Q3-FY24.
Despite the setbacks, the order book increased by 17 per cent sequentially to ₹1,394 crore. The management forecasts a revenue of ₹800-plus crore for the full year, with margins expected to remain at 15-16 per cent in Q4-FY25, indicating a strong margin of over 20 per cent for the quarter.
Dee Development is poised for strong earnings growth due to capacity expansion plans, industry leadership, OPM expansion opportunities, and growth trends in the process piping industry. A positive outlook is maintained with a revised target price of ₹300 in the next 12-15 months, with a bull-case target price of ₹450 over the same period.
Key risks include downturns in end-user industries such as oil and gas and power segments, international exposure, competitive factors, and raw-material volatility.
Published on February 25, 2025.
