DEE Development Engineers Limited ($DEEDEV)

Good evening, ladies and gentlemen, and a very warm welcome to the Q4 and FY 2026 Earnings Conference Call of the Development Engineers Limited. From the senior management team, we have with us today Mr. Krishan Lalit Bansal, Promoter, Chairman and Managing Director; Mr. Pankaj Agarwal, Chief Operating Officer; and Mr. Brham Yadav, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anand Venugopal from Adfactors PR. Thank you, and over to you, sir.

Thank you, Nirav. Good evening, everyone. We welcome you to the Q4 and FY 2026 Earnings Call of the Development Engineers Limited. Before we begin the earnings call, I would like to mention that some of the statements made in today's call might be forward-looking in nature, and hence, it may involve risks and uncertainties, 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 would ensure the call is reconnected [indiscernible]. I will now hand over the call to Mr. Krishan Bansal, sir, to share his views. Over to you, Bansal, sir.

Thank you, Anand. Good evening, 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. Financial FY '26 has been an important year for DEE. We have completed a significant part of our growth CapEx cycle, particularly with full operationalization of the [indiscernible] by fabrication facility and the commissioning of our [indiscernible] plant. At the same time, we have separated the business into core and noncore segments and the results are showing up in our operating performance. Our core business piping, heavy fabrication and others continue to be where we generate the most value in margin, and that is evidenced clearly in our full year operating performance. Q4 FY '26 was a strong close to the year on the back of continued momentum in the core business. The CFO will talk you through the detailed financials but I would like to highlight that core business EBITDA for FY '26 was INR 210.5 crores, up 64.2% year-on-year, reflecting better execution, improved utilization and operate across our facilities. This core business EBITDA excludes the losses from the noncore power segment, which are reflected at the consolidated level. the policy and investment backdrop remains firmly supported. The union budget 627 continues sustained CapEx allocation across infrastructure, transport, energy and industrial colors and India's broader CapEx cycle is gaining traction as corporates in these sectors scale up investments in plant and equipment. Overseas markets, a meaningful part of our core business are equal the [indiscernible] with a clear tick in energy, process industries and infrastructure. Together these domestic and global tailwinds open up a strong multiyear opportunity for our core offerings in pricing, [indiscernible] and allied segments. Within the noncore segment, we are strategically pivoting towards biomass pellet from factory with a focus on enhancing capital efficiency, minimizing incremental capital commitment in the Power segment and building a more sustainable and scalable business model over the medium term. On the power side, on the power side [indiscernible] has been revised to 5.22 per kilowatt hour from 3.5 with the retrospective recovery of almost around INR 5.52 crores. Combined revenue from power and biomass pellet is expected to be around INR 47.71 crores in FY '27. We are also pursuing an [indiscernible] appeal for further tariff optimization along with the restructuring initiatives I mentioned, we also recently commissioned the [indiscernible] which is expected to offset the current cash burn, stabilized segment profitability and support margin improvement going forward. On the core side, during the year, we commissioned our seamless pipe part, this backward integration strengthens our capabilities in high-spec applications, improved supply security, support margins and reduce lead times. As utilization ramps up, the plan should support further operating leverage and margin improvements. With the CapEx cycle [indiscernible] complete or majorly it's complete, I would say. We expect better asset terms, stronger cash generation and improved return ratios going forward. as the improving cash flows and operating performance are expected to support gradual reduction in debt levels going forward. Our order book stands at INR 40 crores giving us strong revenue visibility and a healthy project pipeline across key segments. Demand visibility across our core end markets, particularly power, oil case and process industries in India and overseas remain healthy and its strong order pipeline gives us confidence in delivering profitable growth and long-term value for our stakeholders. Now I invite our CFO, Mr. Brham Prakash Yadav, to take us through the financial highlights for the quarter and full year ended 31st March 2026. Thank you so much.

Thank you, sir. Good afternoon to everyone on this call. Rather good evening to all. I will now take you through our financial performance for Q4 and FY '26 for the whole year. During the quarter, we reported strong growth across most of our key performance parameters with the full year metrics in the later reflection of underlying momentum. Before I get into the numbers, I would note that Q4 FY '25 was an unusually high base as it absorbed revenue and profit spillover from Q3 life last year. It lender read of our performance, therefore, the full year FY '26 [indiscernible] 76.9% year-on-year. revenue from operational Q4 was INR 361.6 crores, which again up by 26.3% year-on-year. And for the full year, FY stood at INR 1,142 crores, which again up by 38% year-on-year, driven by healthy exit momentum in the piping segment supported by strong supply to the oil and gas and power sector. Operating EBITDA for Q4 was INR 65.9 crores for the full year. The operating EBITDA was INR 189.3 crores, with up by 52.9% year-on-year supported by higher ag division level and operating leverage in core business alongside the tariff division on the non-core side. EBITDA margin was for FY '26 versus 15.0% in FY '25, in line with our guidance, profit after tax for Q4 FY '26 stood at INR 27.7 crores, reflecting a stable performance on a high Q4 FY '25 days. For FY '26, PAT increase 6.9% over year-on-year to INR 77.2 crores. This overall performance was primarily driven by higher execution momentum and improved capacity utilization across both facilities. Our 1942 -- our INR [indiscernible] order book provides on multiyear revenue visibility with execution weighted towards spun and fitting and heavy fabrication. In their plan, we remain focused on disciplined project edition and growing our program across relevant and markets. With this, I would like to open the question-answer and look forward to [indiscernible] your question. Thank you.

[Operator Instructions] First question is from the line of [indiscernible] from Bauman Capital Management.

My first question is with respect to the couple of HRG orders that we have received on very recently [indiscernible] that. And what I understand is globally, especially U.S., driven by the data center infrastructure setup and hence, the electricity demand lowdown the grade, there is a massive multiyear order backlog of gas turbines with [indiscernible] and what I also understand is some of the HR systems that are used in these you basically going to be supplying the pipe for those, right? So my question is twofold. One is yes or no, and other parties on Matt's question. Yes, no question is, is this related? Are these orders related to this multiyear backlog that is the Thailand order, specifically recently. And secondly, I was doing some math with respect to the disclosure that I have given. 60% of Thailand capacity is around INR 14,500 is around 8,700 tonnes. The revenue is about INR 150 crores Baguari, which works out to INR 160 per kilo of [indiscernible]. Is this right to think that this is ex material, which is only the value-add portion for [indiscernible] and hence, revenue will be larger than the base? And do you have sufficient capacity available to execute this?

First of all, answer is yes. Most of the orders are related to this from the HR market only from the overseas. And as far as your understanding is concerned, that's also partially correct. This is all -- this is just the value of the Java portion or the value which we shall get from the free show material supplied by the customer. And in some of the cases, we shall be supplying the material also which will add further value to this particular takeover from our unit [indiscernible].

So in that case, if I were to think about it, INR 150 crores is the job work value or if I were to like put it through the gross profit, so the revenue numbers should be much higher, right? Is that the right way to think about it for the [indiscernible]

No, sir. Thailand is primarily we are working on [indiscernible] only in Thailand. So it will not be -- there will not be very high incremental increase. There is some, but primarily, that unit is functioning almost purely on job basis.

Sorry, in that case, is it right to say that the EBITDA margin on this revenue of INR 150 crores would be much higher than 20% because [indiscernible]

You are right.

And sir, the last part of the question, which is effectively any CapEx you need to do to execute this? Or do you have capacity?

No, nothing is required for this particular unit or for this particular order. That has some normal machinery this sometimes plus sometimes minus. I mean, very, very nominal or, I will say, insignificant CapEx may be required to execute this particular drop.

Got it. And the 60% of production capacity that is reserved, it is on the INR 14,500, right?

That's it.

So if you allow me, I also had a question on domestic thermal -- should I go ahead?

[indiscernible] for a follow-up question, please? Next question is from the line of Vaibhav Shah from Equirus Securities.

My first question is on the gross margin. So on a quarterly basis, is there a fuller basis on the gross margin decline -- so of this decline, how much is attributed to comment the inflation? And second, to the product mix [indiscernible] also within the product mix could you share a element product for this tower contribution that has changed over FY '27, '26.

Well, first of all, let me tell you that we -- it's very difficult for us to show all those things on a quarter-on-quarter basis because we are a project-based company. We are not a commodity-based company where everything will go in a straight line. So it's very difficult to explain why it happened and why it didn't happen. So my request is that please compare it on a year-on-year basis, if it is possible. But otherwise, there can be a number of factors going in for -- on quarter by quarter dip or quarter-on-quarter abnormally high rise also. So that's my humble request to you, but I really will not be able to answer specifically that why this margin dip between this Q4. But one of the reason was that some a small portion of trading activities happened, which we continue to do it the year at. But in this particular year, it happened maybe in the -- in quarter 4 also, where the value of the medical just almost 100% or 90%, 95%. So that may be one of the reasons. Otherwise, there is no specific reason to that, sir.

On the similar lines, could you share the current [indiscernible] within our outstanding order book?

Brham, can you share this thing because I'm not 100% up to date on the work in big material values?

[indiscernible] available right now with [indiscernible]

I will let you know later on.

Not as of now?

But broadly speaking, I will say that it may not be exact numbers, but job work values as of now will be less than 20% remaining are all with material orders. No, sorry, sorry. It will be around 30% [indiscernible] will be around 30%, even now also. But these are very, very approximate number, sir. And alloy mix for all our tenancy jobs overall for our thermal jobs in India. They are an alloy ops. So our mix in terms of, I will say, power and oil and gas is for this particular year will be 70% will be going towards power and 30% will be going towards oil and gas, which means almost or maybe around 55% to 60% will be alloy steel and remaining will be [indiscernible]

Understood, sir. Understood. Second question is on the capacity utilization. So what is the current capacity utilization at the new Anjar plant? And in the pipeline? And how do you see ramping up in FY '27? So basically, when could we expect the optimal utilization of these 2 facilities?

We are quite confident that in FY '27, we should be at the optimal level as far as the fabrication facility at Anjar is concerned and also for the seamless plant we may be able to ramp up to maybe around 60% to 70%. But fabrication facility, we should be going up to almost to the expected level.

Right. This is under [indiscernible]

Yes. Almost. I will say almost.

And lastly, sir, could you mention the EBITDA margins within the pricing second half within the core business for piping segment and health fabrication business? And going forward, what would be the sustainable margin for the heavy fabricating business? And how do you see the margin expansion for pricing business?

So again, I will say that on a gross level, I can say with comfort and I can say with full confidence that we shall be above 19% on consol level. But the breakup, again, it's very difficult, but you can very well consider that. And has the fabrication also, it will be almost to the same tune because in the coming year, we shall be doing a lot of jobs with material and hence, our EBITDA margin may drop on the face of it in terms of percentage, but value-wise, it will increase so -- but you kindly consider that our consol level EBITDA will be above 19% in any case.

Next question is from the line of [indiscernible]

Congratulations on great execution. I understand in terms of eligibility and what kind of inflow do you expect still some you have mentioned about INR 2,000, can just clarify what kind of order inflow you expect in 2027? And which segments would be major contributors, if you could throw some light on that.

Pankaj, can you take up [indiscernible]

Let me reply that. So we are expecting more than INR 2,000 crores orders in this financial year. Out of that, the major contributor will be power sector only. We are expecting around 60% jobs from power and rest from oil and gas.

And will this be [indiscernible], I mean, what would be the mix between domestic orders and [indiscernible]

You can say like 60%, 65% will be domestic and around 35 to 40 will be the export orders in this financial year.

Sir, secondly, if you could help understand [indiscernible] been, of course, like we have seen a major order on the fertilizer side by the government company in India. Any development on that front that you're seeing? Will you expect anything from that to also sort of flow through?

We are expecting one job, but I'm not pretty sure in this financially whether it will be matured or not. But yes, government of India is doing great in the fertilizer industry. The new plant is coming up in nongroup. We are expecting some job from them, but not sure whether it will come in [indiscernible]

I will just add on to one more thing that just for the information of what that we are discussing on a very active mode for one of our export customers for the fertilizer unit. That's another field. I will say that that's another field where a lot of traction we are looking at also can become quite a considerable part of our business. I mean fertilizer section can also become a considerable part of our business in the coming future.

And the last question that I have is with regards to working total. There has been some improvement, of course, but how do you see working capital shaping up in [indiscernible],

Brham, if you can take up, please?

Yes. The working capital cycle, definitely, we are on improving trend in case of inventory days and will be -- we are targeting in FY 27 by this inventory days will get reduced from the 15 to 20 days, rather better days roll are almost fixed between 95 to 100 days. we will improve on table days, which is as of now 42 days. This [indiscernible] say paying in advance for the ordering of doing some of the material. So we are negotiating with the suppliers. So definitely, we will have a better negotiation and it will be above INR 70 million to INR 75 million so our total working capital cycle would be around 200 days in coming FY '27. So there will be...

Just to clarify, just to -- I mean, to make you more clear that why inventory days will reduce, I will just again reiterate that since we are doing most of the jobs almost 70% of the jobs towards power, and I have been telling it earlier also that our cash conversion cycle and our inventory holding times for power sectors is much lower than the oil and gas sector. So that will be the major factor, which will be contributing towards a reduction in the inventory days.

Next question is from the line of [indiscernible] from Toro Wealth Management.

Congratulations for the great results. I mean the business momentum indeed looks very strong. Sir, I have 2 questions. First question is with respect to the HRSG orders that we had received in the previous financial year from G1. I mean, I want to know what is the current status of execution for that and see in the similar lines since the U.S. gas plants vendors are seeing increased order flows. Are we also foreseeing any similar orders from GE again?

See, we have a good order book from GE. So we are not expecting much order book in this financial year because we shall be executing those orders. But for duty piping, definitely, there is a surge of the orders from side. So I'm confident that the GT piping orders will come from them.

But sir, again, I will say that apart from GE, like [indiscernible], they have fixed our capacities. Just for this [indiscernible] also we are discussing with other people also like Siemens, we are working. So we are quite confident that they will also enter into some sort of an agreement like what [indiscernible] has done or we are expecting a lot many orders from them also for this particular segment, [indiscernible] section.

And sir, my second question is with respect to the Middle Eastern disruption that has happened during this uncertainties, I mean a good amount of reconstruction and a building work is going to happen next, right? So are we seeing any inquiries coming from that region? If yes, if you can also inform about the nature of such inquiries and the size that would [indiscernible] help us get better inside split.

I mean right now, sir, it's not there. Right now, it's not there because everybody is still assessing the loss and still the situation is not normal until the situation becomes normal, nobody is going to do anything on an emergency basis. But as you have said, we do see it's a big opportunity, which will come our way, and we may have to do something out of the way also to grab that opportunity. It may involve some sort of CapEx or something like that. But still, literally, it is very, very fluid. We just cannot comment only same right now that, okay, this will be the opportunity. But definitely, it's going to a big opportunity.

Next question is from the line of Anil Desai from [indiscernible] Capital Partners.

Congratulations for very good execution. Sir, my first question is that we have given a room at till FY '20. But if this year, we see our order book has increased by 50% while we are projecting 20%, 25% kind of growth. So how should we resulted this? Is this because the delivery time lines will get extended? Or are we kind of -- how should we read into this number?

So [indiscernible] is that these are very, very conservative estimates. We may have to do a little bit more work also. As you are saying and even we are also seeing a lot of direction we may have to do a little more work or we may have to start expanding some capacity also to take care of all those things which is happening. And you have -- you rightly said, your math is absolutely right that we may not be able to restrict to just INR 500 crores in the coming year, which we have said -- so that's likely to increase, but this is what I would like to say that this is what our commitment is for the coming year that this -- we shall surely like to see that number on the board.

And sir, second question, I think you -- it's more of a clarification. But you said that again linked to the order book in the past, you have mentioned that your inventory because you will stock it up at the time of [indiscernible] your inventory kind of moved up in line with the order book this year, actually, the inventory has remained almost same as the order [indiscernible]. So is it mainly because of the power sector order going through? Or is there anything else in terms of working capital cycle, which has changed or is likely to change because of the -- globally, what is happening in the supply/demand side of the overall power sector and the [indiscernible]

Majorly, it is because of power sector, sir, because the deliveries for the power sector raw material is comparatively much larger. So it started flowing late after we placed the order. So that has helped us -- and further, since its execution is also equally fast. So that will help us in the coming years. But in the previous year, the reduction is primarily due to base set only that we place the order [indiscernible] receive of our orders since the delivery cycles are longer, so it has not come into our books.

Next question is from the line of Ankit Soni from [indiscernible].

So just wanted to check on the power sector orders, basically, what is the current portion of the power sector and further on to that, what you see the contribution of power sector revenues in financial year '27 to total revenues. Yes, that would be one. And then I will follow up on that.

Sir, we are present expecting that in this year, we should be doing almost 65% to 70% of our revenue from the power sector.

Okay. And any other -- so what would be the order book contribution right now from -- what are the current power sector orders in our order book right now?

That's more than INR 1,000 crores, even now, so that's more than INR 1,000 crores, I think, around [indiscernible] exact numbers under you'll be able to share, but we are having a substantial high numbers than what we have to execute in this particular year. Of course, some of the orders will spill over to the few coming years also. But at the same time, we are expecting many more orders also in the power sector segment.

Okay. And this will be broadly the thermal power orders, right?

Thermal from India, sir, thermal from India and HRS orders from abroad.

Sure. And one more thing, like what would be the CapEx guidance for financial year '27. And churning around, I think hold of the CapEx and totally or whatever facilities we have, what would be the overall revenue we could do from the existing facilities after doing the CapEx of financially to [indiscernible]?

Sir, it will be almost INR 2,500 crores. This was from quite some time. Just you know whatever CapEx has already been set ever balance, we should be able to ramp up on this. But considering the tailwinds, we do feel that it's the right time. Again, to rethink that we may have to do something for little expansion on the capacity for particularly [indiscernible] going in for a new sector, which we are saying we're seeing a lot of light or green light in terms of nuclear business. So we may have to go for something -- but long trying board, we shall get back to as soon as the DCM is taken on that.

Okay. So broadly, what I could understand is with the overall CapEx and facility, we could be doing around INR 2,500 crores of revenue by around '29, I believe.

'30 is our target, but with the increased flow of orders, if it happens, it can happen earlier also. But that's our target. At present, the target is INR 2,500 by FY '30.

Next question is from the line of [indiscernible] from Nivesh Investment Advisory.

Congratulations on the good set of numbers. Sir, my first question is with respect to this noted edition order on me. So I just want to understand the terms basically project like they wanted more capacity to be booked with us. But like we negotiated at 60%, and we wanted to keep rest of the capacities for the other OEMs and cater to the broader space? Just want to understand on that, right?

That's true because ultimately, you never know if you just tie up with one customer, they can be always some problem. So we always prefer that to more customers should always be aligned. But since they are one of the most valued customer. So we have given them a capacity of 60%. As a matter of fact, many people are talking nowadays for capacity reservations. So that's the first agreement which we have been able to do it. So we do hope that some more similar agreements may happen. But right now, nothing is on discussion. But preliminary, I mean discussions and exploration things are going on.

Okay. Got it. Sir, the reason I'm asking is because, let's say, the total requirement for of the top OEMs. So how much percentage are we, let's say, trying to cater the total as a piping requirement that would happen on the -- let's say, the current disclosed order book of these OEMs. So out of that particular total market, how much are we going to target?

Sir, as we are saying that our very, very conservative estimate is that we have to grow at 20% [indiscernible] but there is any possibility that this number from 20 may go up to 25 or 30 also. So we are prepared for it and there is an opportunity also available for that. But to put it in numbers that from whom it will come, how it will come, it is very difficult with us. But I can only say that there is a huge traction people, the suppliers or vendors for this particular product are not available. And our competition is in India, practically no competition except with 1 or 2 players who also have significantly much lesser capacity. And our competition is broadly with Korean people and some Turkish players only.

Got it, sir, and this was more of outside the data center opportunity, but let's say, inside the data center, are we looking for rigid pipe as well an [indiscernible]

We are working on that also, sir. We are working on that also. But all -- anything related with the metallic pricing, we are working and as a matter -- we have few active inquiries for that. But since it has not matured into an order, we are not saying anything, but we are already in discussion with this segment also.

Next question is from the line of Ankit Gupta from Bambu Capital Partners.

Sir, if you can talk about how is the visibility of alloy sales, particularly 91 to 92. So are we importing this from China? And if you can talk about how is the -- like are we getting the raw material or there has to be some booking for a few months and then [indiscernible]

Earlier, we have been importing averaging either from China or from Europe but after putting up our own seamless pipeline, which is part of we have been able to establish the supply chain majorly from India. So we shall not be highly or I will say that not majorly dependent upon import. So our preference will be to go in for our own manufactured products only. And we have already got a few approvals and approvals are likely to come very, very shortly. So once those 2 approvals come, then we are almost 100% available for any power sector jobs coming in India. As a matter of fact, we have also been able to successfully qualify with some of the foreign players also who may be sourcing the pipe of [indiscernible] our manufacturing unit.

And I think you're [indiscernible]

I'm sorry to interrupt. Your audio is not clear. Can you speak a little louder, please?

So on the seamless pipe side, sir, if you can talk about how the margins, we plan to utilize 50% of the capacity in house and remaining 50% to other players. So if you can talk about like what kind of margins do we expect in this in this new plant whenever it ramps up, let's say, [indiscernible] higher than 70 capacity?

Sir, basically, whatever we shall be using it as part of our backward integration, it will add to our EBITDA levels. whatever purchase margin we have only per case, we shall be getting that margin. But wherever we are selling it as independently since it's a commodity. So the margins may not be very high, but still it will be around 20%.

Next question is from the line of Nishita from Sapphire Capital Partners.

Yes, so I had a clarification question. You mentioned that we can do EBITDA of above 19%. I just wanted to understand is that in a specific segment or on a consol basis that you were guiding?

Consol [indiscernible]

Okay. Okay. And my next question would be that from the INR 19 crores, INR 40 crores of orders that we currently have, what is the execution time line for that? And how much revenue we can book in FY '27 from an order book?

Any of our orders run between 6 to 18 months. So we take an average period of around 12 for any order execution. So that's what it is. So as we were discussing earlier, we may have to ramp up a bit, we may not be able to just grow that 500. But again, I will put it that is this is our target, but we may exceed that target. But this is our [indiscernible] we shall surely do.

Okay. But this is on the conservative basis.

Very, very. Very conservative [indiscernible].

Okay. Okay. Understood. And the CapEx, you did not mention how much CapEx we are doing for -- as I said right now, we have -- we are done with our substantial part of CapEx, only whatever CapEx is left out from the previous year, we shall be doing that. But we may have to rethink, as I was telling a bit earlier that we are discussing on new set of things which may have -- which we may have to do to capture or to avail the opportunity which is available in nuclear sector and many other sectors. So we are working on that. But right now, in FY '27, the CapEx may [indiscernible] INR 20 crores to INR 30 crores.

Next question is from the line of [indiscernible].

[indiscernible]

Can you speak to the handset, if you don't mind?

Yes. Is this better?

Yes.

Yes. My question is on the domestic thermal side. [indiscernible] some of the data that I saw with respect to the timing of the boiler turbine generator orders being awarded to hand L&T. And hence, this is the project time line from all the life thermal projects. The conclusion was that the piping erection which is effectively when the piping needs to go in, will peak in FY '27, '28 roughly during that period. So is it true to say that we should expect a massive step-up on the domestic thermal ordering side of things over the next, let's say, 4 to 6 quarters, if the current 40 gigawatt worth of life projects were to progress in a timely manner, all the new foresee some delays.

Your thought is absolutely right, sir. This thought is absolutely right, but BHEL is going a little slower, but L&T is trying to move very fast. So this -- what we are thinking that is definitely -- it's not moving with the speed as it should. I think we do not know how it will -- they will be able to do it or they might have done some other calculation on that. But L&T is moving quite faster. So we already have a few orders with them and we are discussing a fewer more also with them.

Got it. And hence, the second and last question would be that the INR 2,000 crores number you gave out in terms of order inflow for the year. Is that contingent on some of these rail orders materializing? Or is that going to be additive?

No, no, it's all right now, what we are thinking is it is definitely contingent to [indiscernible].

Next question is from the line of [indiscernible] from.

So my question is on the Malwa power impairment, sir. This is the second year now that we have got a qualified opinion. So what are we doing for this impairment [indiscernible], on this plant, sir?

Sir, as we have been telling, we have already put up a biomass pads front, which helped mitigate this impairment totally. Again, I will get that. It may not be as profitable as it used to be 2 years back. But whatever losses we incurred last year, those losses will not be there. As a matter of fact, there shall be a positive impact because of tariff revision on. And secondly, because of the pellet plants, which we have put it, and we are sure that in the coming year, this impairment qualification will not be there. This is what we feel.

Got it, sir. So is there going to be financial exposure do we have to make any contingency plans for [indiscernible] It's a capital loss against this revised tariff.

What we are now calculating is that whatever TSC, RC or the regulatory commission has decided as on date, they are not going to further educe it because that is their own decision. So our request is that for the upward revision of those tariffs, which we have given us as of now. And what we are saying is that based upon the current level of tariffs, we are expecting [indiscernible] plant shall be a little positive. They were being negative. Hence, there is no question of considering any impairment or any financial [indiscernible]

Sir, when can be resolved? When can we see a clean opinion on our audit?

I don't -- Brham, is it possible that we can get it in the coming quarter or it will -- it happens only at the year-end?

So these are the government agencies.

No. [indiscernible] from audit point of view [indiscernible]

By third quarter. And the art qualification by the third quarter, right? We'll get a clean opinion, not a qualified opinion from [indiscernible]

Next question is from the line of [indiscernible] from Lotus Asset Managers.

Congrats for the strong set of numbers and to the [indiscernible], Sir, my first question is -- my first question is with regard to the power. So have you included INR 5 crore of retrospective benefit in this quarter?

Yes.

To INR 5 crores is there in this particular quarter.

Yes.

Okay. And secondly, sir, so like earlier, we were planning to raise the money through equity, so are we again looking because the stock has moved up and it has performed significantly. So are we looking at -- are we at the [indiscernible] to further look at that equity raise and bring down the debt to that?

Sir, we are only trying work, first of all, to decide on our strategy. So we shall not be able to see anything right now and we will -- when we are clear on our plans that how we want to go about it, what we want to do with -- if we have to raise the money. So I will get back to you. But immediately, nothing is decided. So at the moment, it is decided will come back to you, sir.

Okay. And lastly, sir, on the power side, as you had highlighted in previous question that the deal has been a little slow on the order release. So how are we managing that? How we are balancing that because there is this massive water which have come from the GE and various other players? So because we are keeping that capacity idle or some space for the pay. But in the meantime, we may be losing some orders from the other parties. So how are we balancing that in this particular financial year, like say, INR 10-odd crores of L1 is there. But for the last 3-odd months, we have not been able to get the order. So in the FY '27, how much capacity or revenue we have kept for the payer so that we don't miss on other orders? So I'm just trying to understand the balancing act, which you are doing on the power side.

Sir, balance sheet [indiscernible] do anything right now, if let us say, BHEL releases the order now. So we get the product [indiscernible] time also now accordingly. So whatever times were -- whatever orders we have, we have to put that first. And according to the deliveries only, we have to execute it. It is not that if BHEL gives us the order today and we expect us to execute it next year, that's not possible, sir. So whenever we get an order, the delivery will start from that order date and that delivery will be anything going between 12 to 18 months.

And sir, on the working capital days, like I said, during the plant, we did we had elected that it would be around 150-odd days. Now we are saying that it may be around 200-odd days. Why there is such an increase as compared to the [indiscernible]

We are saying 180 days [indiscernible] are not saying 200 days. We have -- our projection is 180 days only. And that's our first target to achieve it. And then ultimately, we will come to 150 days that also is there, but our target for this particular year is 180 days. I mean if you will see our numbers, our inventory days have considerably come down compared to last year. Our payable cycles have reduced drastically this year because we specifically decided on that because we got a very good sort of discount on our purchases, which is reflecting in our material cost. So of course, the inventory days have increased per se, but we have been able to gather much more margin from the purchase side. So that is the only fallback, which we had in this particular year. Otherwise, this year also, if we had the [indiscernible] days as per the previous year, our profit would have been less, but our inventory days would have been then also less -- so -- but we feel that even if the inventory days are 30 days more and if we are able to let us say that 1% more EBITDA. That will be -- that is more beneficial and that's how we have stabilized. But again, going forward, we are again thinking that how to manage it competitively still better. Our strategy this year is that we shall be going in for more sales build discounting so which will help us to reduce our inventory days drastically. And as with many of our export customers, we are likely to get some milestone payments also. So that also will help us reduce our inventory days.

The next question is from the line of Ankit Gupta from Bambu Capital Partners.

Sir, if you can just about on the fabrication side also, we have got some recent orders and that has been scaling up to [indiscernible] if you can talk about it.

I couldn't get your question properly.

On the heavy fabrication business [indiscernible]. And the quarter also from INR 170 crores.

Yes, yes. Actually, basically, what I'm saying is that first of all, we are ramping up the capacity over there also. Second is earlier, all jobs used to be on [indiscernible], but since last 1 year, the model is shifting, and we are getting the jobs with material with our materials. So that's why our cover is increasing from that particular profile. So that's the basic reason for that. Of course, we are ramping up our capacity also.

Next question is from the line of [indiscernible].

Just one question on [indiscernible] very, very good, right [indiscernible]. So I just want to know your thoughts on why we are holding there from being more CapEx and with a more capacity range because I just want to know what you are thinking because at [indiscernible]? If you have more capability to customer need more order to us. So just want to know your thoughts why you're holding back and yes.

Sir, we are not holding that at all. As I told you during the meeting, so we are on the drawing board for that. That's how should we go about it. You have rightly said the [indiscernible] story. So we have to be a little careful in deciding on all those aspects because whatever capacity we build, it has to be sustainable also. It has to be sustainable about 10, 15 years. So that's why it's taking a little time. But we are very close to finalizing what we wish to do it. And hopefully, very soon, we shall come out with our blueprint that's whatever thought is and what you have said is absolutely right, sir, there is a huge opportunity. We must have cash on that. But how do cash, what is our risk appetite, all those things need to be assessed. We are working on that very hard and we should definitely come back to you very fast.

Next question is from the line of Kush Shah from [indiscernible]The line for the participant dropped. As there are no further questions, I'll now hand the conference over to the management for closing comments.

Thank you. Thank you so much. Thank you all for taking today. My sincere appreciation goes out to our team and our shareholders for your continued trust and support which strengthens our results to execute our strategy and even greater [indiscernible]. But any further queries, please do [indiscernible]. Thank you so much. Thank you so much for your time.

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

Thank you.