Broker’s call: Dee Development (Buy)
Mirae Asset Sharekhan
Dee Development Engineers reported a significant 32% increase in revenue, driven by a surge in oil & gas orders. The company's margins improved by 87 basis points to 16.9%, primarily due to a favorable product mix. The order book stands strong at ₹2,428 crore, with Q1 order inflows reaching ₹700 crore. Management has reiterated growth guidance of a bare minimum of ₹1,500 crore in revenue, with margins exceeding 19% and order inflows of ₹2,000 crore.
Despite a 150% rally over the past year, the re-rating appears structurally justified rather than excessive. The stock's valuation multiple is supported by three key pillars: expanding order inflows and sector tailwinds, a robust order book providing revenue visibility, and an active de-leveraging trajectory improving return ratios and balance sheet quality.
As execution aligns with the order book and the balance sheet strengthens, the current valuation is deemed sustainable with potential for further re-rating rather than a mean reversion. The analysts maintain a positive outlook on the stock with a target price of ₹740, noting key risks such as downturns in end-user industries, international exposure, competitive factors, and raw-material volatility.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
