Diffusion Engineers Limited reported a 35.9% year-on-year increase in consolidated net profit to ₹166.77 million for the quarter ended June 30, 2026, driven primarily by a more than threefold surge in profits from associates. In contrast, standalone net profit declined 29.7% to ₹99.79 million, weighed down by a sharp contraction in other income. The divergence highlights the growing significance of international ventures in the group’s overall profitability, offsetting domestic operational pressures.

The Board of Directors approved the unaudited standalone and consolidated financial results on August 11, 2026, in compliance with Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. PGS & Associates, the statutory auditors, issued an unmodified review report on the financial statements. The results reflect the impact of the New Labour Codes notified by the Government of India in November 2025, which the company accounted for as an exceptional item in the prior fiscal year.

Financial Performance Overview

Standalone revenue from operations grew 30.7% to ₹959.13 million from ₹733.72 million in Q1FY25. However, total expenses rose 29.6% to ₹860.73 million, limiting the benefit of top-line growth to the bottom line. Consolidated revenue from operations expanded 36.5% to ₹1,101.08 million from ₹806.65 million. The consolidated profit before tax stood at ₹201.36 million, up from ₹155.04 million, aided by a significant increase in the share of profit from associates to ₹44.59 million from ₹13.77 million. On an operational basis, consolidated EBITDA rose to ₹142 million from ₹106 million year-on-year, though the EBITDA margin edged lower to 12.90% from 13.12% over the same period.

The following table summarises the key financial metrics across both standalone and consolidated reporting:

The table below highlights the consolidated EBITDA performance for the quarter:

What the Numbers Show

The divergence between standalone and consolidated performance highlights the growing contribution of international associates. While standalone profitability weakened due to lower non-operating income, consolidated earnings benefited from a more than threefold increase in associate profits. The marginal compression in EBITDA margin, despite strong revenue growth, reflects rising operational costs, with total consolidated expenses increasing alongside top-line expansion. This suggests that Diffusion Engineers' overseas ventures are becoming a critical driver of overall group profitability, offsetting domestic operational pressures.

Key Disclosures

The company operates in a single segment: Welding Fabrication Technology and Engineering. The financial results include one foreign branch with revenues of ₹2.70 million and net profit of ₹0.30 million for the quarter. Additionally, seven subsidiaries were reviewed by other auditors, contributing ₹195.78 million in revenues and ₹22.39 million in net profit before consolidation adjustments. The Diffusion ESOP Trust holds 300,000 equity shares, with 100,000 options accepted by employees at an exercise price of ₹325 per share.

Diffusion Engineers Limited has secured a domestic order worth approximately ₹26.31 crore for the supply of RAPH Rotor Assembly to the power industry. The contract involves a staggered delivery schedule, with a minimum of 3 rotors to be delivered on or before March 31, 2027. The detailed delivery timeline is expected to be communicated by the customer shortly and will be intimated to the stock exchanges upon receipt if considered material.

The transaction does not involve any interest from the promoter, promoter group, or group companies, nor does it qualify as a related party transaction. The disclosure was made in compliance with Regulation 30 of the SEBI Listing Regulations, 2015, and the circular dated November 11, 2024.

Order Details

The specifics of the order were detailed in an annexure accompanying the filing, providing clarity on the scope and commercial terms of the agreement.

Chanchal Rajesh Jaiswal, Company Secretary and Compliance Officer, signed the intimation on June 29, 2026.