Diffusion Engineers Limited delivered a record financial performance for the fiscal year ended March 31, 2026, achieving its highest-ever quarterly and annual sales, EBITDA, and profit after tax on a consolidated basis. The Board of Directors, at its meeting held on May 16, 2026, approved the audited standalone and consolidated financial results and recommended a final dividend of ₹1.50 per share. The company's statutory auditors, PGS & Associates, issued an unmodified opinion on both standalone and consolidated financial results. With over four decades of operations, the company has completed 11,000+ projects across sectors including cement, steel, power, engineering, sugar, defence, railways, mining, and oil & gas, and serves customers across 35+ countries.

Consolidated Financial Performance

At the consolidated level, Diffusion Engineers posted its highest-ever annual revenue from operations of ₹4,066.28 Mn in FY26, up 21.28% from ₹3,352.76 Mn in FY25. EBITDA (excluding other income) rose 21.18% to ₹571.42 Mn, with an EBITDA margin of 14.05%. Profit after tax surged 39.87% to ₹504.10 Mn from ₹360.41 Mn in FY25. For Q4 FY26, consolidated revenue grew 38.08% YoY to ₹1,415.74 Mn, EBITDA rose to ₹206.89 Mn versus ₹147.81 Mn in Q4 FY25, with an EBITDA margin of 14.61% for the quarter. Consolidated net profit for Q4 FY26 stood at ₹159.70 Mn versus ₹130.10 Mn in Q4 FY25. The company has achieved a 5-year consolidated revenue CAGR of 21%, with EBITDA and PAT CAGRs of 22.48% and 32.28% respectively over the same period. The key consolidated financial metrics are presented below:

*Excluding Other Income and share of profit/loss of Associates

Standalone Financial Performance

On a standalone basis, revenue from operations grew 12.06% to ₹3,542.03 Mn in FY26 from ₹3,160.87 Mn in FY25. EBITDA (excluding other income) rose 14.57% to ₹469.29 Mn, with an EBITDA margin of 13.25%. Net profit increased 32.27% to ₹446.43 Mn from ₹337.53 Mn. For Q4 FY26, standalone revenue grew 12.18% YoY to ₹1,132.70 Mn, while EBITDA rose 13.49% to ₹154.13 Mn, with an EBITDA margin of 13.61%. Standalone PAT for Q4 FY26 stood at ₹116.72 Mn, a YoY decrease of 3.05%. The key standalone financial metrics are summarised below:

*Excluding Other Income and share of profit/loss of Associates

Key Financial Ratios

The investor presentation highlighted the company's improving return profile over a five-year period. RoE improved to 18.52% in FY26 from 16.86% in FY25, while RoA stood at 10.60% in FY26 compared to 9.98% in FY25. RoCE remained steady at 16.27% in FY26 versus 16.24% in FY25. The total debt-to-equity ratio remained low at 0.07x in FY26. The presentation noted that the decline in RoE and RoCE in FY25 was primarily attributed to the increase in equity base following the IPO. The five-year trend in key ratios is presented below:

Balance Sheet and Cash Flow

The standalone balance sheet as of March 31, 2026, showed total assets of ₹4,768.46 Mn and total equity of ₹3,844.87 Mn. Cash and cash equivalents decreased to ₹939.64 Mn from ₹1,184.50 Mn at the start of the year. Net cash from operating activities was ₹174.72 Mn, while net cash used in investing activities was ₹307.04 Mn. On a consolidated basis, total assets stood at ₹5,104.31 Mn, with total equity of ₹4,055.86 Mn and cash and cash equivalents of ₹975.60 Mn. Consolidated net cash from operating activities was ₹227.90 Mn for the year. Profit attributable to owners of the parent stood at ₹503.23 Mn for FY26.

Working Capital Analysis

The investor presentation also provided a working capital trend analysis on a standalone basis. Inventory days remained stable at 66 days in FY26, consistent with FY25. Receivable days increased to 98 days in FY26 from 82 days in FY25. Payable days stood at 60 days in FY26. Net working capital days were 75 days in FY26. The working capital metrics over five years are summarised below:

Order Book Status

The company's order book remained robust, providing healthy revenue visibility. As of March 31, 2026, the total order book stood at ₹1,741.09 Mn, rising further to ₹1,994.82 Mn as of April 30, 2026, compared to ₹1,032.09 Mn as of March 31, 2025. The segment-wise order book is presented below:

Dividend and AGM

The Board recommended a final dividend of ₹1.50 per share (15% on face value of ₹10) for FY2025-26, subject to shareholder approval at the ensuing Annual General Meeting. The 44th Annual General Meeting is scheduled for Monday, September 07, 2026, via Video Conferencing. The record date has been fixed as August 26, 2026, with the share transfer book closure from August 27, 2026, to September 07, 2026. The dividend, if approved, will be paid within 30 days from the date of the AGM.

Management Commentary

Commenting on the performance, Mr. Prashant Garg, Chairman & Managing Director, said: "FY26 was a strong execution-led year for Diffusion Engineers Limited, marked by healthy revenue growth, improved profitability, and continued expansion across core industrial segments. The company benefited from sustained demand from sectors such as steel, mining, cement, railways, power and engineering where asset life enhancement solutions, maintenance and repair continue to gain increasing relevance. Growth momentum strengthened significantly in the second half of the year, particularly in Q4 FY26, supported by higher order execution because of better order mix, improved customer demand, and better utilization across manufacturing facilities. EBITDA for FY26 stood at ₹571 Mn with margins remaining healthy at around 14%, reflecting disciplined cost management, operational efficiencies, and a favourable product mix. PAT grew strongly by nearly 40% YoY to ₹504 Mn, supported by operating leverage and improved overall business performance."

Manufacturing and Expansion

Diffusion Engineers operates five manufacturing units in Nagpur, Maharashtra, covering product lines including special welding electrodes, flux-cored wires, wear plates, wear parts, and heavy engineering equipment. The company's proposed expansion facility at Plot No. 33-B/1/1 & 33B/1/1 Part, MIDC Hingna, Nagpur — spanning 10,850 sq. mtrs — commenced operations in November 2025 for special purpose electrodes and wire strips. A further proposed expansion is expected to commence in Q1 FY27. The company's R&D facility at Unit I holds DSIR approval and accreditation by the National Accreditation Board for Testing and Calibration Laboratories under ISO/IEC 17025:2017.

Other Key Decisions

The financial results included an exceptional item of ₹7.00 Mn related to the New Labour Codes, representing a one-time impact on provisions for long-term employee benefits such as gratuity and compensated absences. The Board appointed M/s Chitalely Mehta & Associates as the Internal Auditor and M/s A. B. Verma & Co. as the Cost Auditor for FY2026-27. The Nomination and Remuneration Committee approved the grant of 3,00,000 Employee Stock Options under the ESOP Scheme 2025 at an exercise price of ₹325 per option, vesting in four tranches of 25% each. During the year, the company also incorporated a new wholly owned subsidiary, Diffusion Wear Solutions Middle East for Welding Wire Rods Electrodes and Similar Products Manufacturing LLC – S.P.C, in the United Arab Emirates.

Diffusion Engineers Limited has secured a substantial domestic order worth approximately ₹8.16 crores for the supply and maintenance of Roller Press Rolls for the cement industry. The company made this disclosure under Regulation 30 of SEBI Listing Regulations on April 30, 2026.

Order Details and Specifications

The contract involves the supply and maintenance of Roller Press Rolls specifically designed for cement industry applications. The order has been awarded by a domestic client and carries an execution timeline of 8-9 months.

Regulatory Compliance and Disclosure

The company has ensured full compliance with SEBI disclosure requirements under Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024. The disclosure confirms several key compliance aspects:

Company Operations and Market Presence

Diffusion Engineers Limited operates from its registered office in Hingna Industrial Area, Nagpur, Maharashtra. The company maintains a comprehensive pan-India presence with branches strategically located across major industrial centers including Ahmedabad, Chennai, Chittorgarh, Faridabad, Jamshedpur, Kolkata, Pune, Raipur, and Secunderabad.

Business Impact and Strategic Positioning

This order represents a significant addition to the company's order book, reinforcing its position in the industrial equipment sector. The cement industry focus aligns with India's infrastructure development requirements, positioning the company to benefit from ongoing industrial growth.

The disclosure was signed by Chanchal Jaiswal, Company Secretary and Compliance Officer, ensuring proper regulatory adherence and stakeholder communication. The company holds ISO 14001 certification and maintains GSTIN registration 27AAACD8008L1ZK.