Diffusion Engineers Ltd

Investor meeting and plant visit

• Pre-intimation under SEBI LODR for a meeting with investors and analysts.
• Date confirmed for Thursday, 27 August 2026; time subject to change.
• No unpublished price sensitive information will be shared during the visit.
• Discussion based on generally available information; no material business updates expected.

Event details

• Virtual investor/analyst meeting held on 20 August 2026 at 04:00 PM.
• Participant: IIFL Wealth.
• Based on generally available information; no unpublished price sensitive information discussed.

Investor meeting

• Virtual investor/analyst meeting held on 19 August 2026 with Seven Canyon Advisors.
• Discussions based on generally available information; no Unpublished Price Sensitive Information disclosed.

Financial Performance

• Consolidated Q1 FY'27 revenue: INR 1101.08 million; YoY 36.5%.
• Consolidated EBITDA excluding other income: INR 141.54 million; margin 12.85%.
• Consolidated PAT: INR 166.77 million; YoY 35.98%.
• Standalone Q1 FY'27 revenue: INR 959.13 million; YoY 30.72%.
• Standalone EBITDA excluding other income: INR 121.54 million; margin 12.67%.
• Consolidated order book as of 30 Jun 2026: INR 209 crores; up 20.4% QoQ.

Orders and Capacity Expansion

• Heavy Engineering order book: INR 159 crores; Wear Parts INR 26.42 crores; Welding Consumables INR 24.22 crores.
• New orders in period totalled ~INR 62.47 crores across cement, defense, power (VRM parts 9.88; roller-press 8.16; roller assemblies 10.63; shafts 7.49; RAPH rotor 26.31).
• Capex expansion: INR 100 crores; Heavy Engineering capacity to 18,000 MT; Nagpur facility; phase-wise live.
• First priority: improve utilization of expanded facilities and absorb fixed costs over larger revenue base.
• Ramp-up time for new capacity: 2–3 years to full contribution.

Capex and Projects

• IPO proceeds: INR 67 crores unutilized as of December 2025; expected to be fully utilized by year-end.
• New capacity utilization in phase-wise manner; not 100% yet.
• Expansion plan to start again once utilization of new capacity reaches ~70–80%.
• Turkey operations already up and running; revenue starting to rise; UAE facility ready for manufacturing and services.

Growth and International / R&D

• 5-year consolidated revenue CAGR about 21%.
• R&D spend close to 1% of revenue; metallurgical team conducting trials and development.
• International presence across 35+ countries; UAE and Turkey as growth levers.
• New growth opportunities in railways and defense ecosystems; pursuing supplier qualifications.

Q&A Highlights

• Growth drivers across segments: total growth ~30%; order book at start of year remains strong.
• Over 80% of INR 209 crores executable in FY27; customers exploring pre-ponement of deliveries.
• Raw-material volatility caused ~1–1.5% gross margin contraction; stabilization seen; steel up ~20%, tungsten up heavily.
• Defence revenue ~1.5–2% of total; potential upside with deeper engagement and subassemblies.
• Railways orders: pilot approvals underway; conversion expected within 9–12 months after workshop approval.

Outlook and Guidance

• FY27/FY28 revenue growth around 20%; potential to double over 3–4 years per management.
• EBITDA margins expected to improve by ~100–200 bps in FY27/28.
• Maintain disciplined working capital, raw-material procurement, and capital allocation.
• International expansion to 35+ countries; ongoing capacity ramp and diversification of end-markets.

Meeting details

• Virtual investor/analyst meet with IIFL Wealth on 20 August 2026 at 04:00 PM.
• Schedule subject to change due to exigencies.

AGM details

• AGM date/time: 7 September 2026 at 2:00 PM IST via VC/OAVM.
• Venue: Deemed at the Company’s registered office; VC/OAVM facility provided.
• Cut-off for remote e‑voting: 26 August 2026.
• Record date for final dividend entitlement: 26 August 2026.
• Book closure: 27 August 2026 to 7 September 2026 (both days inclusive).

Resolutions proposed

• Ordinary: adoption of standalone financial statements.
• Ordinary: adoption of consolidated financial statements.
• Ordinary: final dividend of ₹1.50 per equity share.
• Ordinary: re-appointment of Ms. Chitra Garg (retiring by rotation).
• Ordinary: ratification of cost auditor remuneration for FY2026-27.
• Ordinary: revision in remuneration of Mrs. Neelu Garg with annual increments.
• Special/Ordinary: ESOP scheme approvals and related arrangements.

Voting results

• Voting results for each resolution not provided in the excerpt.

Dividend

• Final dividend proposed: ₹1.50 per equity share (15% of face value).
• Record date for entitlement: 26 August 2026.
• Dividend payment date target: on or before 6 October 2026.

Director changes

• Ms. Chitra Narendra Garg to retire by rotation and be considered for re‑appointment.
• No other director change announced for the AGM period.

Auditors

• Cost Auditor remuneration to be ratified: ₹60,000 plus taxes and travel expenses.
• Statutory Auditor: PGS & Associates; tenure continuing through 2028.
• Secretarial Auditor: Madhav Kawde; Internal Auditor: Chitaley Mehta & Associates; Cost Auditor: AB Verma & Co.

Material related party transactions

• Sales to Diffusion Engineers Singapore Pte. Ltd. ₹24.89m.
• Sales to Diffusion Wear Solutions Philippines Inc. ₹70.95m.
• Sales to Nowelco Industries Pvt. Ltd. ₹12.15m.
• Sales to Diffusion Eurasia Mühendislik Sanayi Ve Ticaret Anonim Sirketi ₹33.26m.
• Sales to Mecdiff SD. BHD ₹9.06m.
• Purchases from LSN Diffusion Ltd ₹50.88m.
• Remuneration to MD ₹24.00m; Remuneration to Neelu Garg ₹66.24lpa (₹5.52lakh/month).

Employee stock options (ESOP) and related approvals

• ESOP 2025 approved; up to 7,00,000 options across the group.
• 3,00,000 options granted in year; 1,00,000 accepted; ₹325 exercise price.
• Vesting in four 25% tranches; Vesting dates: 2026‑2029; 4‑year exercise window.
• ESOP reserve created; treasury‑share impact noted; no dividend/vote until exercise.

Meeting details

• Pre-notification of virtual investor/analyst meeting on 19 August 2026 at 7:00 PM.
• Meeting hosted by Seven Canyon Advisors.
• Schedule subject to change due to exigencies.
• Discussion based on generally available information; no UPIS.
• Venue: Virtual meeting.