🧪 Business Model (WTF Do They Even Do?)
DEEDEL fabricates complex piping systems, pressure vessels, and heat exchangers for industries like oil & gas, power, and chemicals. Basically, they manufacture the arteries of the industrial world — except made of stainless steel, not cholesterol.
They also specialize in:
- Boiler superheaters & desuperheaters
- High-pressure spools
- Skids, stacks, and exotic alloys like Inconel, Hastelloy etc.
- Green hydrogen infra (just dropped a partnership in June 2025 👀)
💸 Financial Highlights (FY25)
| Metric | FY24 | FY25 |
|---|---|---|
| Revenue | ₹789 Cr | ₹827 Cr |
| EBITDA | ₹109 Cr | ₹124 Cr |
| Net Profit | ₹26 Cr | ₹44 Cr |
| EPS | ₹4.94 | ₹6.32 |
| ROE | 5.5% | 6.97% |
| ROCE | 10% | 8.89% |
- 📈 5Y Profit CAGR: 26%
- 🔧 OPM consistently improving, now at 15%
- 🚫 Dividend: None. They’re hoarding.
📊 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹319
- P/E: 50.5x — Yikes! Even Bollywood scripts aren’t this inflated.
- P/B: 2.75x
- Book Value: ₹116
- Market Cap: ₹2,205 Cr
Fair Value Range (based on ~20x FY25 EPS ₹6.3–6.5):
➡️ ₹126 – ₹130
(Which means the current price is 2.5x this. Good luck.)
⚙️ What’s Cooking?
- 🧾 June 2025: $10M piping order (to be executed by Feb 2026)
- 💚 Hydrogen pivot: Tied up with clean-tech firm for projects in India & Thailand
- 🏗️ Expanding CWIP rapidly: ₹148 Cr in Mar 2025 vs ₹66 Cr a year ago
🏦 Balance Sheet
- Debt: ₹431 Cr
- Reserves: ₹732 Cr
- Net Worth: ₹801 Cr
- CWIP rising = capex mode ON
- Not alarming debt, but high working capital cycle (534 days) is a red flag 🚩
💰 Cash Flow – Sab Number Game Hai
- FY25 CFO: -₹60 Cr 🥴 (vs +₹103 Cr in FY24)
- Capex: -₹164 Cr
- FCF: Deep in red 🚨
- Financing Inflow: ₹227 Cr → IPO proceeds/ESOP/loans likely
📈 Peer Comparison (Selected)
| Company | P/E | ROCE | OPM | Market Cap |
|---|---|---|---|---|
| DEEDEV | 50.5x | 8.9% | 15% | ₹2,205 Cr |
| Kaynes | 141x | 14.4% | 15% | ₹41,370 Cr |
| Tega | 53x | 17.7% | 21% | ₹10,651 Cr |
| Syrma SGS | 63x | 12.4% | 8.6% | ₹10,778 Cr |
| Jyoti CNC | 72x | 24.4% | 27% | ₹23,273 Cr |
🤨 Clearly, DEE is not the most expensive, but nowhere near as efficient or profitable as its mid-cap peers.
🧾 Miscellaneous (Promoters, Shareholding)
- Promoter Holding: 70.3%
- DIIs: 17.4% — increasing steadily
- FIIs: Down to 0.65% — likely post-IPO exit
- Public: 11.6%
No major red flags in ownership, but recent ESOP allotments signal possible future dilution.
🧠 EduInvesting Verdict™
DEE is riding the infra + industrial capex wave, and it’s got solid operating leverage. But a 50x P/E for a company with:
- Low ROE (<7%)
- Weak cash flows
- And rising CWIP drag
…feels like drinking jaljeera from a champagne flute — fancy, but doesn’t really hit.
Unless margins explode or hydrogen biz turns out to be a hidden gem, the stock looks way ahead of its fundamentals.
➡️ FV Range: ₹126–130
➡️ Current Price = ✈️ Sky high
➡️ Outlook: “Piping hot story, lukewarm fundamentals.”
Tags: DEE Development Engineers, piping stocks, hydrogen infra, industrial capex, smallcap India, SME IPO, DEEDEV stock analysis, FY25 results
✍️ Written by Prashant | 📅 3 July 2025
