GLOBAL ECONOMIC OVERVIEW

Global economic growth in FY26 remained resilient but uneven, supported by moderating inflation and the gradual easing of monetary policy across major economies, even as trade tensions, tariff actions and geopolitical uncertainty continued to weigh on business sentiment. Energy and industrial capital expenditure held up well through the year, underpinned by three durable themes directly relevant to DEEs business - a sustained global build-out of gas-fired and combined-cycle power capacity to meet rising electricity demand, particularly from data centres and AI infrastructure; continued investment in oil & gas and petrochemical capacity, especially across the Middle East and North America; and an accelerating energy-transition and decarbonisation agenda spanning green hydrogen, carbon capture and grid-scale renewables. Against this backdrop, global capital goods and process-equipment markets remained a relative bright spot, with order backlogs at major OEMs and EPCs- DEEs principal customer base - at or near multi-year highs.

ECONOMIC REVIEW: KEY COUNTRIES AND REGIONS RELEVANT TO DEES BUSINESS

United States: The US economy continued to expand at a moderate pace through FY26, with energy and industrial policy continuing to favour domestic manufacturing, LNG export capacity and gas-fired power generation to meet data-centre-driven electricity demand. Sustained order backlogs at OEMs such as GE Vernova and continued refining and petrochemical investment support DEEs existing supply relationships in the region.

Middle East (Saudi Arabia, UAE, Qatar, Kuwait, Iraq): GCC economies continued to benefit from healthy energy revenues and sustained diversification investment under national transformation programmes such as Saudi Vision 2030, driving continued downstream, petrochemical and power capacity additions. Iraqs ongoing refinery upgrade and reconstruction programme, and the UAEs expanding industrial base, remain important medium-term opportunities for DEEs export order book, reinforced by its ADNOC relationship and MENA customer-support presence.

Southeast Asia (Thailand, Vietnam, Taiwan): Thailands economy, home to DEEs Bangpakong manufacturing facility, continued to benefit from its role as a regional manufacturing and export hub, while power-sector capacity additions in Vietnam and Taiwans continued investment in semiconductor and power infrastructure supported new order inflows from the Companys Thailand entity during the year.

Europe: European economies continued to prioritise energy security and industrial decarbonisation following the regions continued shift away from Russian gas, sustaining investment in gas-based power and re-gasification infrastructure. DEEs relationships with European OEMs, including MAN Energy Solutions and John Cockerill, position it to benefit from this continued capex cycle.

INDIAN ECONOMY

India remained among the fastest-growing major economies through FY26, supported by resilient domestic demand, continued fiscal focus on capital expenditure, and a manufacturing sector operating at above-long-term-average capacity utilisation. The Union Budgets continued emphasis on infrastructure, industrial capex and manufacturing incentives, together with policy support for renewable energy, emission control and industrial modernisation, has sustained a favourable investment climate for capital-goods manufacturers such as DEE. Indias expanding thermal and nuclear power capacity pipeline, ongoing refining-capacity expansion, and emerging opportunities in green hydrogen, data centres and semiconductor manufacturing collectively underpin a robust domestic ordering cycle for the Companys core piping business over the coming years.

INDUSTRY OVERVIEW

The global process piping industry continues its transformative phase, driven by robust infrastructure investment across oil & gas, power, chemicals and process industries, alongside rapid technological advancement in fabrication, welding automation and quality assurance. As economies invest in industrialisation, energy security and decarbonisation, demand for sophisticated, high-integrity piping solutions continues to strengthen.

DEE Development Engineers Limited (DEE or the Company), with an operational legacy stretching back to 1988, has consolidated its position as one of Indias largest process piping players by installed capacity and among the leading players globally. FY26 was a defining year in this journey — the Company moved decisively from a multi-year, capex-heavy build phase into execution and utilisation, commissioning the expanded Anjar Pipe Fabrication Unit (30,000 MTPA) and Indias first captive Seamless Pipe Manufacturing Plant of its kind (7,000 MTPA), while continuing to diversify into new energy verticals including green hydrogen, biomass pellets and carbon capture. Strategic investments in automated robotic welding, induction bending, digital radiography and clean-room manufacturing strengthen the Companys manufacturing, quality and execution capabilities, underpinned by supplier approvals from NTPC (super-critical piping) and NPCIL (nuclear applications).

COMPANY OVERVIEW

DEE Development Engineers Limited (DEE Piping Systems) is a leading Indian manufacturer of process piping players by installed capacity, a position built over nearly four decades since the Companys incorporation in 1988. DEE designs, engineers, manufactures and supplies prefabricated piping systems, pipe fittings, pressure vessels, modular skids, induction pipe bends and, from FY26, seamless pipe, serving oil & gas, power (including nuclear), petrochemical, chemical and process-industry customers on a build-to-print, specification-driven basis.

The Company operates seven manufacturing facilities across Palwal (Haryana), Anjar (Gujarat), Numaligarh (Assam) and Bangpakong (Thailand), together with a dedicated engineering division in Chennai, and its non-core biomass power and pellet businesses in Punjab. DEEs certification stack — ISO 9001:2015, ISO 3834-2, ISO 14001, ISO 45001, PED and PED Module-H, and ASME PP, S, U and U2 Stamps — supports a marquee, multi-continent customer base including Reliance, ADNOC, Tata Projects, HMEL, Technip Energies, JGC, McDermott, John Cockerill, GE Vernova, Mitsubishi Heavy Industries, Siemens, Doosan, BHEL and L&T, among others. With a workforce of 1,100+ employees and a track record of consistent, repeat business with its customers, DEEs stated operating philosophy is to make every customer a repeat customer.

OPPORTUNITIES

Global & Domestic Capacity Expansion: rising investment in oil & gas, power (including super-critical thermal and nuclear) and petrochemical infrastructure, in India and in DEEs key export markets, continues to expand the addressable market for complex, high-specification piping.

Nuclear Energy: DEEs status as an approved NPCIL vendor positions the Company to participate in Indias expanding nuclear capacity programme — an early-stage but structurally significant medium-term opportunity.

Data Centres & Semiconductor Fabs: hyperscaler-driven data centre capex and Indias emerging semiconductor fabrication pipeline represent new, high-growth verticals with meaningful piping content per unit of installed capacity.

Green Hydrogen & Industrial Gas: the National Green Hydrogen Mission, together with DEEs strategic stake in Molsieve Design Ltd (nitrogen generation, oxygen plants, ammonia cracking and hydrogen purification systems), provides a platform to participate in both grey and green hydrogen infrastructure and clean-energy process skid packages.

Carbon Capture & Decarbonisation: DEEs entry into carbon-capture project supply, and its broader alignment with ESG-linked EPC programmes, opens an emerging revenue stream tied to global decarbonisation trends.

Government Initiatives: continued FDI inflows into manufacturing, MSME support measures, and tightening emission-control regulations across power, oil & gas, chemical, steel and cement sectors are collectively expanding demand for advanced piping and emission-control equipment.

THREATS

Raw Material Price Volatility: exposure to fluctuations in steel and specialised alloy prices can pressure margins, necessitating disciplined procurement and back-to-back pricing strategies.

Regulatory & Compliance Risk: stringent domestic and international regulatory and certification requirements can result in penalties, delays or reputational impact if not consistently met.

Geopolitical & Economic Uncertainty: ongoing global trade tensions, tariff actions and regional conflicts can disrupt supply chains and affect input costs and export competitiveness.

SEGMENT-WISE PERFORMANCE

Segment	Description
Piping	Prefabricated engineering products, pipe fittings, piping systems and, from FY26, in-house seamless pipe
Power	Biomass-based power generation and, from FY26, biomass pellet manufacturing
Heavy Fabrication	Wind turbine tower manufacturing

PIPING SEGMENT

The Companys core segment delivered a strong year, with Core Business revenue of 1,086.5 crore, up 46% over FY25, led by higher oil & gas execution and the ramp-up of the Anjar Pipe Fabrication Unit to 30,000 MTPA. The commissioning of Indias first captive Seamless Pipe Manufacturing Plant (7,000 MTPA) in March 2026 marks a significant backward-integration milestone, already carrying NTPC approval, foreign-OEM qualification and its first commercial order (~58 crore). The segments order book was further strengthened by a Reservation Agreement with an international EPC major for a majority of DEEs HRSG pipe spool fabrication capacity, and a multi-million-dollar Letter of Intent from a global OEM.

POWER SEGMENT

DEEs power segment comprises biomass-based generation at Abohar and Muktsar, Punjab (combined 15.5 MW, fully contracted under long-term PPAs with PSPCL) and, from FY26, biomass pellet manufacturing. A Punjab State Electricity Regulatory Commission order dated 27 March 2026 revised the tariff for Malwa Powers Muktsar plant upward for its extended 10-year term (following expiry of the original 20-year PPA), with retrospective recovery of the differential amount applied during the interim-tariff period and a further annual escalation on the variable component, the Order being challenged by PSPCL. The Companys new 72,000 MTPA biomass pellet plant at Gulabewala, Muktsar, set up during FY26, commenced commercial operations in Q1 FY27, converting agricultural residue into pellets for co-firing at thermal power plants and supporting customers Renewable Purchase Obligation compliance. Together, these developments are expected to move the segment toward cash neutrality in FY27.

HEAVY FABRICATION SEGMENT

The heavy fabrication segment, engaged in wind turbine tower manufacturing through DEE Fabricom India Private Limited, secured its first windmill tower order with material during FY26 - an important proof point for the segments entry into renewable-energy fabrication, supported by an installed capacity of 32,400 MT/year.

STRATEGIC EXPANSION AND CAPABILITY ENHANCEMENT

FY26 was the year DEEs multi-year growth capex programme converted into commissioned, revenue-generating capacity. Key developments:

Anjar Pipe Fabrication Unit: scaled in stages from 3,000 MTPA (April 2024) to a fully commissioned 30,000 MTPA (September 2025, ahead of schedule) a U-shaped, automation-led facility close to Kandla and Mundra ports, now carrying the Companys oil & gas and export execution and freeing the Palwal facility to focus on higher-margin power sector work.

Seamless Pipe Manufacturing Plant: commissioned at Anjar; commercial production commenced 19 March 2026 (7,000 MTPA, ~?89.74 crore investment), reducing dependence on external suppliers, with NTPC approval, foreign-OEM qualification and its first order already secured.

Landmark Customer Engagements: a Reservation Agreement with an international EPC major for a majority of DEEs HRSG fabrication capacity; a multi-million-dollar LOI from a global OEM; new orders from the Companys Thailand entity and the domestic power sector; and the first windmill tower order together signalling a shift from tender-driven business to structural, capacity-reservation partnerships.

Hydrogen & Industrial Gas Platform: building on the strategic stake in Molsieve Design Ltd, DEE continued to develop its position in nitrogen, oxygen, ammonia-cracking and hydrogen-purification systems, complementing its green hydrogen clean-technology partnership signed during the year.

Carbon Capture: the Company continued to supply customised process piping solutions into carbon-capture projects, extending its diversification into decarbonisation-linked infrastructure.

Non-Core Segment Restructuring: the PSERC tariff order for Malwa Power and the commissioning of the Gulabewala biomass pellet plant together mark a decisive step toward sustainability for the non-core power segment.

Balance Sheet Strengthening: subsequent to year-end, the Company raised 300 crore through a preferential issue (Board approval 3 June 2026; EGM 27 June 2026) at 502 per share, with the substantial majority of net proceeds earmarked for debt repayment.

With a closing order book of 1,940 crore (up 58% year-on-year) and a further 211 crore in L1 positions, the Company maintains strong revenue visibility into FY27.

OUTLOOK

Despite external macroeconomic uncertainty, DEE remains confident in its growth trajectory. The Companys FY27 guidance calls for order inflows exceeding 2,000 crore (approximately 60% power, 40% oil & gas; ~60% domestic, 35-40% export), core revenue in the range of 1400-1500 crore, and core EBITDA margins of 18-20% supported by utilisation ramp-up at Anjar and the seamless pipe plant. Under its longer-term Vision 2030 roadmap, the Company is targeting revenue in excess of 2,500 crore, driven by disciplined capital allocation, capacity utilisation and margin expansion.

Structural tailwinds - Indias capex-led infrastructure cycle, the Union Budgets continued focus on industrial and infrastructure investment, an emerging nuclear capacity programme, and global demand from data centres, gas-turbine backlogs and refining capex - are expected to sustain order momentum. Capex beyond FY27 will be limited to completion and maintenance spends, with any incremental capacity triggered only by sustained anchor-customer commitments, reflecting the Companys disciplined approach to capital allocation as it enters its utilisation phase.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Key Financial Highlights (\u20b9 Crore)	FY26	FY25	FY24	FY26 vs FY25
Revenue from Operations	1,142.0	827.0	788.8	+38.0%
Core Business Revenue	1,086.5	744.8	706.7	+45.9%
Operating EBITDA	191.2	123.8	102.5	+54.5%
EBITDA Margin	16.7%	~15.0%	13.0%	+~179 bps
Profit After Tax (PAT)	77.2	43.6	26.2	+77.3%
PAT Margin	6.76%	5.27%	3.32%	+~148 bps
Diluted EPS (\u20b9)	11.14	6.65	4.92	\u2014
Closing Order Book	1,940	1228*	\u2014	+58.0%

*FY25 closing order book per prior-year disclosure; to be reconciled against the FY25 comparative in the audited FY26 financial statements. Diluted EPS for FY26 to be inserted once confirmed by Finance.

Revenue from Operations grew 38.0% to 1,142 crore, with Core Business revenue (excluding the non-core power segment) up 45.9% to 1,086.5 crore, reflecting stronger execution across the piping segment, particularly oil & gas and power. Operating EBITDA grew 54.5% to 191.2 crore, with margin expanding to 16.7% aided by operating leverage from newly commissioned Anjar and seamless-pipe capacity. Profit After Tax grew 77.3% to 77.2 crore, with PAT margin improving to approximately 6.8%. Consolidated EBITDA for the year absorbs a one-time Labour Code-related liability and the non-core segments operating loss; adjusted for these, Core Business profitability improved by a wider margin.

Q4 FY26 revenue stood at approximately 361.6 crore, with Q4 PAT of approximately 27.7 crore, reflecting the initial contribution from the ramped-up Anjar facility and the newly commissioned seamless pipe plant.

The Anjar Pipe Fabrication Unit and Seamless Pipe Manufacturing Plant capex, together with the Heavy Fabrication expansion and biomass pellet facility, were funded through a combination of internal accruals and debt. Subsequent to the year-end, the Companys 300 crore preferential issue is expected to materially strengthen the balance sheet, with approximately 75-77% of net proceeds directed toward debt repayment, supporting a reduction in finance costs from FY27 and a medium-term objective of a net-cash or minimal net-debt position by FY29.

CHANGES IN KEY FINANCIAL RATIOS

Particulars	FY26	FY25	FY24	Reason for variance >25% (if any)
Current Ratio (x)	1.33	1.42	1.12	FY25 change driven by inventory, receivables and fixed-deposit growth
Net Debt-Equity Ratio (x)	0.77	0.58	0.95	Expected to improve further in FY27 following the June 2026 preferential issue
Debt Service Coverage Ratio (x)	1.92	1.81	1.34	\u2014
Return on Equity (%)	9.1%	7.0%	6.0%	\u2014
Inventory Turnover Ratio (x)	1.38	1.19	1.69	FY25 decline due to capex-driven inventory build-out
Trade Receivable Turnover (x)	3.62	3.74	4.30	\u2014
Trade Payable Turnover (x)	6.05	3.00	3.27	\u2014
Net Capital Turnover Ratio (x)	3.95	4.60	8.51	FY25 decline due to inventory, receivables and fixed-deposit growth
Net Profit Ratio (%)	6.77%	5.27%	3.32%	Improvement driven by operating leverage and margin expansion
Return on Capital Employed (%)	10.1%	8.4%	8.7%	Expected to inflect upward as Anjar/ seamless-plant utilisation ramps

[TB] = to be inserted from the FY26 audited financial statements once finalised by the Finance team; working capital and return-ratio commentary in this MD&A should be read alongside the Companys stated FY27 working-capital normalisation programme (see Strategic Expansion, above).

RISKS AND CONCERNS

DEEs principal risks include volatility in raw material prices (steel and specialised alloys), which can pressure production costs and margins; stringent regulatory and compliance requirements across the global markets it serves, non-compliance with which could result in penalties, delays or reputational impact; geopolitical risk, including trade restrictions and tariff actions, which could disrupt supply chains and affect market access; competitive and technological pressure, requiring continuous investment in innovation and capacity; and macroeconomic factors such as currency and interest-rate movements. In addition, FY26s capacity additions carry execution risk on the pace of utilisation ramp-up at Anjar and the seamless pipe plant, and the Companys working capital cycle remains elevated following capex-driven inventory build-out, both of which management is actively addressing through the FY27 utilisation and working-capital normalisation programmes described above. The Companys balance-sheet strengthening through the FY26 preferential issue is intended to build additional resilience against these risks.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

DEE maintains a comprehensive internal control framework designed to ensure operational efficiency, reliability of financial reporting, and compliance with applicable laws and regulations, aligned with industry best practice and reviewed regularly to address emerging risks. The internal audit function operates independently and reports to the Audit Committee, comprising independent directors, with regular audits assessing the adequacy of controls across financial and operational processes, including asset safeguarding and accurate, timely recording of transactions. The framework is subject to continuous enhancement to remain responsive to the Companys changing scale and business environment, including the operational and financial complexity introduced by the Anjar and seamless-pipe capacity additions during FY26.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

DEEs workforce stood at 1,100+ employees as at year-end, supported by a 2,000+ strong skilled and semi-skilled production workforce across its Indian and Thai facilities. FY26s capacity ramp-up — the Anjar expansion, seamless pipe plant and biomass pellet plant — drove significant new hiring across manufacturing, quality and project-execution roles. The Companys HR philosophy centres on transparency, meritocracy and continuous development, with an Employee Stock Option Scheme (ESOP) aligning employee incentives with organisational goals, and regular engagement through drills, seminars, open forums, surveys and focus-group discussions. The DEE Skill Development Centre, established under the Atul Krishan Bansal Foundation, continues to widen access to technical and vocational training, including a dedicated welding school. Industrial relations across all units remained cordial throughout the year, supported by DEEs continued focus on employee welfare, safety and career development.