Diffusion Engineers Ltd (NSE: DIFFNKG) Q3 2026 Earnings Call dated Feb. 09, 2026
Corporate Participants:
Prashant Garg — Chairman and Managing Director
Abhishek Mehta — Chief Financial Officier
Analysts:
Unidentified Participant
Varun Jain — Analyst
Vigil Shah — Analyst
Sunil Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to The Diffusion Engineers Limited Q3 and 9 month FY26 earnings conference call. This conference call may contain certain forward looking statements based on the beliefs, opinions and expectations as on the date of this call. These statements are not the guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone.
Please note that this call is being recorded. I now hand the conference over to Mr. Prashant Garg, Chairman and Managing Director for Diffusion Engineers Limited. Thank you. And over to you sir.
Prashant Garg — Chairman and Managing Director
Good evening everyone and welcome to Diffusion Engineers Earning Conference call for the third quarter and nine months ended December 31, 2025. We are delighted to have you join us today and joined by Mr. Abhishek Mehtar, our CFO, Ms. Sanchal Jaiswal, Company Secretary and Compliance Officer and our Investor relations team from Ag Factors pr. The investor presentation and media release have been uploaded to the stock exchanges and are available on our website. Before we dive into the quarterly performance strategic developments, let me briefly introduce our company. For those of you who may be new to our story.
Diffusion Engineers Ltd. Founded in 1982 and headquartered in Nagpur, is a leading Indian engineering solution provider focused on building consumables, railways and parts and heavy engineering equipment. With over four decades of expertise, the company serves critical maintenance and performance needs across core industrial sector including industries such as cement, steel, power, mining engineering and Sugar Dell. Operates a fully integrated manufacturing platform uniquely producing specialized electrodes, flux core wires, composite wear plates ready to fit wear parts and heavy engineering equipment all under one roof. This integration ensures high quality cost, efficiency and reliability for demanding industrial applications.
Over 80% of our revenues are coming from repeat customers reflecting our strong customer relationships. The company manufactures critical equipment such as high pressure grinding rolls, industrial fans, air separators, air preheaters and other such large and complex equipment from its Nagpur based facilities and exports to 30 plus countries. With IPO funded capacity expansion underway and A focus on a higher value engineering product. Dell is well positioned for accelerated growth over FY27 to FY29. FY26 has been a year of steady execution, strengthening fundamentals and strategic capacity creation for revision engineers. Despite operating at high utilization levels, we have continued to deliver double digit growth, improving profitability and enhancing our long term growth visibility.
Our performance this year reflects the strength of our integrated business model, deep customer relationships across industries and four decades of engineering expertise. During the period under review, the company delivered healthy revenue growth supported by strong execution across welding, consumables, wear solutions and heavy engineering. Our consolidated EBITDA margins remain stable at around 13 to 14% despite operating in a high capacity utilization environment. This stability underscores our disciplined cost management improving product mix. Importantly, we continue to see margin headroom as new capacities come online and scale efficiencies kick in. Profitability has also been supported by better absorption, operating leverage and a growth contribution for higher value products and solutions.
Our order book continues to remain robust standing close to 2 billion rupees reflecting sustained demand across cement, steel, power, mining and infrastructure sectors. We are particularly encouraged by strong traction in wear based and engineered parts, continued demand for specialized welding consumables, healthy inquiry levels for large heavy engineering equipment including high pressure grinding roles. Over 80% of our business comes from repeat customers which highlights the sticky nature of our offerings and trust customer place in our execution capabilities. Currently we are operating at approximately 85% capacity utilization across key product segments. While this reflects strong demand, it also reinforces the importance of our ongoing capacity expansion program.
Our integrated operations from consumable to airplane to heavy engineering equipment continue to differentiate us in the marketplace. Very few players in India possess this end to end capability under one roof and this remains our key competitive advantage. An Update on capex and Expansion as you are aware we are in the midst of a significant expansion phase fully funded through our IPO proceeds. Some of the key updates include welding consumables expansion expected to come alive shortly adding 10 tons per day of incremental electrode manufacturing capacity. Reference capacity increased by 25% to more than 250 square meters per day.
A new manufacturing line enhancing backward integration and improved margins is getting ready at a manufacturer’s place. Commissioning of new heavy engineering facility by the end of FY26. We expect that these new assets will deliver an asset turnover of 3 to 3.5 times with full utilization to be achieved over next 2 to 3 years, that is by FY 2028 29. Our long term strategy and Vision Our strategy remains focused on increasing the share of value added high margin products, deepening relationships with marquee customers, expanding our global footprint with exports now reaching our above 30 plus countries and leveraging on our DSIR approved R& D facility to drive product innovation and customization.
With the current expansion cycle, we are building the foundation for the next phase of growth. The outlook and guidance for looking ahead. We remain confident of delivering double digit revenue growth even at our current utilization level. With new capacities coming online, FY27 onwards should start seeing accelerated growth in the range of 25% over the medium term we are targeting ebitda margins of 15 to 16% driven by scale, backward indication and this year product mix. Our long term aspiration is to build diffusion engineers into a $6 billion top line post CAPEX. The demand across the demand environment across infrastructure, cement mining and manufacturing remains supportive backed by government initiatives such as MAKE in India and PLI as well as rising private phasing.
With that now I invite our CFO Mr. Mehta to take you through Q3 and 9 months FY26 financial performance.
Abhishek Mehta — Chief Financial Officier
Thank you Prashant Sir. I will now walk you through our standalone and consolidated financial performance for Q3 and 9 months FY26. We’ll start with consolidated financial performance highlights for quarter ended 31st December 2025. Revenue from operations was 1,008.24 million in Q3 FY26 as against 791.98 million in Q3 FY25 y o y increase of 27.31%. EBITDA excluding other income was at 135.05 million in QP. FY26 as against 104.72 million in includes the FY25 increase of 28.96%. EBITDA margin excluding other income for the quarter was at 13.39%. Profit after tax stood at 120.11 million in Q3FY26 as compared to 71.01 million in Q3FY25 bio increase of 69.14%.
Consolidated performance highlights for nine months ended 31st December 2020 Revenue from operations was 2650.54 million in nine months. FY26 as against 2327.47 million in nine months FY25 y o y increase of 13.88%. EBITDA excluding other income was at 364.54 million in nine months FY26 as against 3.23.75 million in nine months. FY25 increase of 12.60%. EBITDA margin excluding other income for nine months was at 13.75%. Profit after tax stood at 344.4 million in nine months FY26 as compared to 230.29 million in nine months FY25 y over increase of 49.55%. Now I will come to standalone performance highlights for quarter ended 31st December 2023.
Revenue from operations was 876 million in Q3FY26 as against 735.42 million in Q3FY25 by the increase of 19.12%. EBITDA excluding other income was at 116.75 million. Include the FY26 as against 85.67 million include the FY25 increase of 36.27%. EBITDA margin excluding other income for the quarter stood at 13.63%. Profit after tax stood at 88.54 million in Q3FY26 compared to 63.86 million in Q3FY25 y o y increase of 38.65%. Now standalone performance highlights nine months ended 31st December 2025. Revenue from operations was at 2409.33 million in nine months FY26 as against 200 151.18 million in nine months FY25 bio y increase of 12%.
EBITDA excluding other income was at 315.16 million in nine months FY26 as Against 273.81 million in nine months FY25 increase of 15.10 million. EBITDA margin excluding other income for the nine months ended stood at 13.08%. Profit after tax stood at 329.71 million in nine months FY26 compared to 217.12 million in nine months FY25 y o y increase of 51.86%. With that, I now open the floor to any questions you may have. Thank you for your time and continued support.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll Wait for a moment while the question queue assembles. The first question is from the line of Varun Jain from Dollar Capital. Please proceed.
Varun Jain — Analyst
Yeah. Hi, good evening sir. So my first question is on this acquisition. So just wanted to understand like what is this company and it is a pre revenue company from what I’ve seen and you got 10% so how does it fit in?
Prashant Garg — Chairman and Managing Director
So we are talking about Tejarup Sunway Systems Private limited. So this company is involved in the design and development of advanced systems for aerospace, marine and land applications. And right now they are focusing on developing a solution for Vishwarat Vishworath stands for very short range air defense system. And they are in the process of developing laser beam riding man portable missiles. The fact that they are a peer review company is absolutely right. But they have been able to secure a project prototype sanction order or project sanction order under DAP 2 category of DAP 2020. And they are only one of the two companies in India who have got this project sanction order.
And they are in advanced stages of developing the solution which is needed for this man portable missiles which have become very, very critical for, you know, manning and for protecting our borderlines. And currently there is no other Indian company or in fact in the world there are only two companies who have this solution. And this Indian company is now trying to develop this under Atman Nirmar Bharat and make a full indigenous solution. Now the purpose of investment is not just financial, it is also strategic. Because with this investment we also get manufacturing rights once a prototype is approved by the regulatory authorities which can be DRDO and Indian army.
So in exchange of this investment we also get involved directly in the development of the prototype and in the and in the engineering of mass production once the prototype is approved. So this is the reason why we have invested in this company.
Varun Jain — Analyst
Sir, you have just bought 10%. So that is just so that you can be the welding supplier to them and the main technology which they are using to manufacture and all that will rest with them and they will be producing and selling. You will just be the welding supplier and that’s why you have started this relationship with a 10% stake.
Prashant Garg — Chairman and Managing Director
No, we are not just a welding company. We are an engineering company now and we aspire to become a broad based engineering company and not just a welding company. And when we say that we will get the manufacturing rights, our intention is to manufacture the entire system and not just aspects related to welding in this solution that they are developing. So we will get the manufacturing rights to manufacture the Missile as well as the launcher.
Varun Jain — Analyst
Okay. Okay. And so just, just since you have paid like I think you valued it something between 40 to 45 cr. So how have you valued this company since they don’t have any revenue?
Prashant Garg — Chairman and Managing Director
Varun, I would take this question. So we have done valuation based on the evaluation report received from the valuers and also the estimated value of the PSO which they have received and the estimated orders. If the prototype is done, it is valued on that basis. We have taken valuation of valuation reports of valuers for this purpose.
Varun Jain — Analyst
Okay, sir. Okay. And so just last. So what is your guidance for FY27 revenue and margin guidance.
Prashant Garg — Chairman and Managing Director
So for revenue guidance we will be in late teens for sure. And as well as on the margins we will be somewhere. Our EBITDA would remain in this level. Maybe 1 or 2%. 1% which may 100 to 200 bips we expect to increase which in turn will increase our pat margins.
Varun Jain — Analyst
Okay. Okay sir, that’s all. I’ll come back in with you.
operator
Thank you. Thank you. Participants to ask a question you may press star and 1. Now. Participants who wishes to ask a question may press star N1. Now the next question is from the line of Mehmeta, an investor. Please proceed. Ma’, am, your line is not audible. The next question is on the line of Varun Jain from Dalit Capital. Please proceed.
Varun Jain — Analyst
Yeah, so I had another follow up on. So sir, you had indicated in the past that you were L1 in I think some railway contracts for Vande Bharat. So just wanted to know what’s the status on that?
Prashant Garg — Chairman and Managing Director
Yeah, so we have received LOI for. So there were six contracts in Weaver in which we were in the top two bidders and typically we don’t because we don’t have a previous experience and we not approved vendors yet. We will get trial orders so to say considering out of the total tendered quantity. And in six contacts we were in the top two bidders category out of which we received LOIs for already three such contracts. And post receipt of LOIs, our capacity assessment and capability assessment has been carried out by rights so and we are expecting their reports, we are expecting it to be positive and approved and post that we will get a confirmed purchase order from the tender issuing authorities which are different divisions of railways.
So that is work in Progress. And already three LOIs have been received and our manufacturing facilities has been inspected by rights and we are in the process of getting the orders and then order execution will start.
Varun Jain — Analyst
Okay and so sir, what is the timeline for this? If you can indicate something.
Prashant Garg — Chairman and Managing Director
So I think these contracts will be executed within the next three to five months, depending on the size of the contract. Yes.
Varun Jain — Analyst
Okay. And are they like higher margin contracts compared to your other, you know, roller press, solar and other orders?
Prashant Garg — Chairman and Managing Director
So these are. Please bear in mind that we are entering into a new sort of space and therefore it is. And because these are developmental orders, we can’t really comment on the margins as of now because there is a learning curve involved and these are new activities that we are doing. So estimated margins is. We have some numbers, but it is only after the execution of the project or at the late stage of the project execution we will come to know what margins we are making. But even if in either case high margin or no margin, the numbers are not going to make significant difference in the overall margin scenario of the company because these are contracts which we will get.
They will not be very sizable in value, but they are very important to open new gates for us going forward once these items get approved by railways.
Varun Jain — Analyst
Okay, and, and answer your unit 5, I think your unit 5 was being done. So that was for this wire stripper, right, which you guys were importing. So is that done?
Prashant Garg — Chairman and Managing Director
Yes, the slitting line for making wires we come has been installed and we are already producing our own strips which is a raw material, very important raw material for our flux coat wire production. And we have also. I’m also happy to inform you that yesterday we commissioned the 10 ton electrode plant and that has also gone online. So our indicated manufacturing expansion and unit 5 is already completed.
Varun Jain — Analyst
Okay. So sir, now you won’t need to import this wire stripper at all or still there will be requirement.
Prashant Garg — Chairman and Managing Director
No. So we were not importing the strips before. Also we were buying it from outside this. We have made it in house which will help us increase our margins for manufacturing of this flux core wire. Part of the quantity is still being bought because the current machine meets. So our requirements are increasing for strips and I think we will need to add part of the equipment more to have 100% in house manufacturing of the strips. But more than 50% is coming from in house and balance is coming from our regular vendor which over time, you know, will further increase the percentage will further increase from in house production.
Varun Jain — Analyst
Okay. Okay sir, thank you and all the best.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Vigil Shah from RTL Investments. Please proceed.
Vigil Shah — Analyst
Yeah, thanks a lot for the opportunity. First question is did I get it correct that you said that once your capacity expands, the revenue potential of entire, I mean entire company would be at six.
Prashant Garg — Chairman and Managing Director
So we indicated that our asset turn is close to 3 to 3.5 times of our investment. The capacity expansion started happening when our revenue was around 335 crores which was last year. And our previous plant and machinery asset size was roughly around 95 crores. So that is how we came up with this number of 3 to 3.5x and we are investing close to 100cr. So considering that after our capacities go fully live and utilization comes to around 85% of the added capacity, we expect to be able to do a turnover of 600 to 700 crores with this additional capacities.
Vigil Shah — Analyst
Okay, and by what time frame do you think that your capacity utilization will reach? Around 85%.
Prashant Garg — Chairman and Managing Director
So we expect it to happen by anywhere between FY28 and FY29.
Vigil Shah — Analyst
Okay, thank you. And another question is on your recent acquisition. So I just want to understand that. What are your credential in making missile or launcher? Because if I look at your product line, it is though there is some amount of heavy engineering involved. But these are very different type of products. So what are your credential? And secondly, if the other company gets a prototype approved, does DRDO allow it to kind of contract manufacturer the manufacturer to some manufacture it anyone or it is that company itself has to produce it.
Prashant Garg — Chairman and Managing Director
So I understood part of your question which you asked that what credentials or sort of experience do we have? I did not understand the second bit of the question. Sorry, if you can please repeat.
Vigil Shah — Analyst
Yes, prototype is, I mean is with the company where you have taken 10% stake. Now wouldn’t government ask that company itself to produce is like you take make a prototype and what was suggesting is that you can just make a prototype and then they can get a contract manufactured anywhere. That kind of arrangement which looks very difficult in such high stake defense kind of weather. So that is what I want to understand that what are the regulations around allowing it to be manufactured by somebody else?
Prashant Garg — Chairman and Managing Director
Right. So a we are already a defense supplier. So we are supplying our welding consumables for manufacturing of the T90 tank and armoring applications. We are also bidding for, you know, precision manufactured parts in the defense sector where not just the welding consumables, but it also needs engineering, fabrication and machining capabilities. So while you’re right to observe that, you know we are involved in heavy engineering which involves manufacturing of large parts involving machining, fabrication, heat treatment and other complex operations. But we also Manufacture precision engineering parts which are smaller in size. So we have also supplied some parts to Skyroad which is a private space tech company based out of Hyderabad which use the parts that we supply to them as dyes for the filling of the propellants in the rockets.
So we have experience and it’s just that the engineering capability and machining capabilities we have we would need to invest more in newer facility to manufacture smaller parts. Right now we are making larger part but the engineering capability exists with us. So while we have. So that is developed by Tejo Root Sunmail Systems Private limited in consultation with DRDO and he mrl and they are so the army and the Indian Armed forces need the solution so quickly that they are almost for prototyping. They are, you know, offering their own labs and 3D printing facilities to manufacture these parts in house while because they want to get this project successful.
And the most important bit is to make it indigenous so that they don’t have to depend on foreign countries and the supply chain disruption that may happen because of geopolitical so for prototyping it’s almost like we are taking over but we are getting involved in this stage and prototype prototyping will take at least one to two years to get approved. So we are now getting involved at this stage to start developing the engineering and manufacturing facilities to manufacture the part once the prototyping is done. So propulsion technology is not as fit that will be developed by Tejaru in support by the Indian Armed forces and the DRDOs who already have a very well established proportional technology.
Our bit is more on the contract manufacturing side which you mentioned. So once the design is ready we will give you a manufacturing partners who will make the item as per the design developed by Tezo Group.
Vigil Shah — Analyst
Okay sir, got it. Thank you very much.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Sai Saki from NEEM Capital. Please proceed.
Unidentified Participant
Hi, thanks for the opportunity. So my question is with regard to the capacity expansion in the heavy engineering segment. So I understand that the additional capacity assets on 3x so there’s a sort of a vision with regard to the revenue that we’re looking to arrive at. But could you provide some more color on the pathway to get to that revenue? For example, is this additional capacity going to help us run through the order book quickly or do you think it provides us an opportunity to manufacture more complex engineering? Good. Could you price a mock another?
Prashant Garg — Chairman and Managing Director
So the Additional capacity will first of all enable us to get more orders because we are restricted by the number of orders we accept because of our current capacity utilization. Our customers can clearly see that we are busy and we are almost full. So they don’t load us more with more contracts because you know, they can see our capacity utilization is already high while they are also seeing the erection in progress and you know, the plant coming sort of online like the construction of the plant happening. So they’ve already started coming to us and started asking us how much more orders can be load on you.
So this is so more orders because of more capacity. This is one part of the answer. The second is of course we are adding to our machining capabilities which will enable us to manufacture more complex and precision parts, especially of the larger size when it comes to heavy engineering product line of our business. This could not have happened without a newer plant, a plant with more space where we could have installed these machines. So also the nature of items will change a bit and we will start accepting orders where we can carry out critical and machining of critical machining of large parts.
Unidentified Participant
Understood. And so thanks for that clarity. And as a follow up to the previous participant question with regard to the investment in stage groups, it sounds like we sort of the manufacturing rights that the company expects. It sounds like it doesn’t necessarily entail an end to end solution, for example, having to kind of develop the propulsion expertise or sort of manage explosives, etc. So it’s largely around the sort of the outer shell of thought or not necessarily a fully functioning system. Right. You’re like a certain segment of the overall is what you’re aiming for.
Prashant Garg — Chairman and Managing Director
Right. So even in manufacturing of, you know, such systems, there’s typically not a single manufacturer who has all the sort of capabilities or the manufacturer typically doesn’t own all the technologies which gets involved in the manufacturing of some such parts. A lot of things involves buying things off the shelf or from different approved vendors who already have that experience and things are assembled together. So our intention is to be that ultimate aggregator where we are able to sort of assemble the entire system in our workshop and supply it to the Indian armed forces. It might be probably initial days, but has the team sort of probably you haven’t arrived at that stage yet, but probably have a sense of like is this a revenue share model or a sort of royalty model, etc. But I guess those details are yet to be ironed out. Right? Yes. Right now the focus is to get the prototype up and running and in the parallel we are working on the engineering for mass manufacturing. You need to understand the difference between prototyping and mass manufacturing. A lot of engineering gets into developing lot of tools and lot of dies and jigs and fixtures when mass manufacturing comes. So there’s a lot of engineering involved in that as well. So we are taking care of that bit and while tableop is focusing on getting the prototype in place.
Unidentified Participant
Thank you all and all the very best.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Sunil Jain from Nirvana Bank Securities. Please proceed.
Prashant Garg — Chairman and Managing Director
Yeah, good evening and thanks for taking my question. Sir, my question relate to what was the roller revenue which has been included in 9 month and where you see it in FY26 and 27. So roughly around by the end of this year we will do close to around 60 to 70 cr in by the end of FY26 and for FY27 we expect this to grow in a similar sort of percentage levels as indicated by Abhishek before. Please bear in mind that the 60 to 70 cr is almost like 100% growth over last year. So considering that you know next year we expect to grow at around late teens or mid-2020 to 25% levels from this year.
Sunil Jain — Analyst
And sir, since the plant is starting from first of towards the end of this year and will have a good capacity next year. So where you would like be looking your order booking towards the end of this this year to start with for the new year.
Prashant Garg — Chairman and Managing Director
So I think the real increase in the order book will start happening by roughly around by the end of this year, the Q4 of this year and also you know by the mid or end of next Q1 of next year. So customers have already sort of started. You know customers regularly keep visiting our facilities and we started seeing the expansion which is in progress and we have already started discussing about larger quantities that they typically used to plan with us. Of course this will take some time and some confidence building from our side, but we think by the end of Q1 next year our order book should increase substantially from what it is right now.
I think the real effect of expansion in the order book will start happening by the end of Q1.
Sunil Jain — Analyst
Okay and sir what type of margin expansion you are looking at here? Seems like you will be near about last year margin in on EBITDA level without the return next year where you are seeing the margin.
Prashant Garg — Chairman and Managing Director
So you know margins in the short term get affected by raw Material price volatility. So if the volatility is sort of gradual, we don’t see that much of a problem. But if it is sort of very volatile, then of course in short term infectious because it takes. There is always a timeline between the raw material prices increasing and be able to pass on that price hike to our customers. Certain raw materials like tungsten, molybdenum, nickel and cobalt which are high sort of performance materials, the prices of these raw materials have gone up significantly in the last month or so.
So you’re right to say that in spite of the fact that, you know, our margin improvement has happened by the end of this year we may end up at the same EBITDA level. But going forward we are hoping margin expansion of 100 to 200 basis point in our EBITDA levels in spite of this volatility considering the scale of operations as they are increasing.
Sunil Jain — Analyst
So that is targeted in the next year or maybe over a period of.
Prashant Garg — Chairman and Managing Director
One or two years in the next year by FY27.
Sunil Jain — Analyst
Okay. Okay, great. Thank you very much.
operator
Thank you. Before we take the next question, we would like to remind participants that you may press Star and one to ask a question. The next question is from the line of Rohan Mehta, an investor. Please proceed.
Unidentified Participant
Hello, Good evening. Thank you for the opportunity. Sir, if you could just shed some light on any specific end industries that have been driving the demand and you know, demand for our products specifically or is it uniform across our application sectors.
Prashant Garg — Chairman and Managing Director
So I think the top two industries which are driving our growth or three industries would be cement, steel and power cement. Because there’s a lot of capex happening in brownfield and greenfield expansion in the sector driven primarily by capacity expansion by two or three large cement producers in India. Steel is also seeing a major capacity expansion across different integrated steel manufacturers and power sector Also I think there is a lot of focus again on thermal based or coal based power generation. And there are new orders percolating from the expansion that Adani Power and NTPC is doing.
So this is driving it. Apart from this, there’s also growth coming in from engineering sector which is typically players who are then supplying ultimately to the same end customer industry that I spoke to you about, which is steel, cement and power. So we’re getting a good amount of orders from manufacturers of equipment which are supplying to these sectors.
Unidentified Participant
Got it sir, got it. So we can expect the same industry spread to remain in the foreseeable future. Demand spread from these industries?
Prashant Garg — Chairman and Managing Director
Yes. While we keep speaking to our customers and they are very confident about this sort of expansion happening for the next three to five years. And I think there is only more and more need for integrated manufacturers with good quality and timely execution and you know, and the order book can swell quickly considering the expansion happening in the industry.
Unidentified Participant
Got it sir, got it. Just to touch upon our capacity, if you could give us what the utilization levels are at present and if they are below the optimal levels, what kind of timelines we can expect before capacity utilization reaches optimal level. And the third part of the question is once optimal levels are reached, do we have any CAPEX plans on the horizon maybe over the next year or two.
Prashant Garg — Chairman and Managing Director
So before we are undergoing this CapEx, our current utilization levels are 80 to 85%. And after the capacity expansion gets completed, of course we are doubling our capacity. So the utilization levels will come down to say, especially in the key product segment will come down to say around 50 to 60%. And I think in the next 12 to, in next 24 months to 30 months, we should be able to get it back up to 80 to 85% between next 24 to 36 months.
Unidentified Participant
Understood? Understood. So with the new CapEx, after doubling maybe two to two and a half years down, we’ll again reach our current utilization levels of 85. And 85 is a comfortable level or would you look at, you know, ramping that up as well?
Prashant Garg — Chairman and Managing Director
No, I think 85% is for manufacturing is already sort of too high. We should start expansion planning before we reach 80% so that by the time that level comes up we are ready with new facilities.
Unidentified Participant
Understood. So that makes sense. Just last query, if you could shed some light on the overall long term strategy in terms of cross selling, sourcing and synergies from these basically relating to sourcing and cross selling.
Prashant Garg — Chairman and Managing Director
So can you please explain a little bit more about cross selling and cross sourcing. Sorry for my ignorance.
Unidentified Participant
In terms of, in terms of raw material sourcing, if we have any sort of questions to, you know, take care of any volatility in raw material.
Prashant Garg — Chairman and Managing Director
Right. No. So you know, tungsten for example is seen volatility which is unlike ever seen, ever. So for example, current price levels of tungsten are. Tungsten is 300% or more in fact than average price levels of 2024 and I think more than 200% of average price levels of 2025. So you know, you can’t really plan such things and you have to depend on passing on the cost to the customers. But yeah, you know, some of the things that we are doing is, you know, working with more vendors, especially Indian based vendors so that we don’t have to depend on, you know, we are not concentrated or dependent on one single vendor.
And also like we set up our internal strip manufacturing or strip slitting and winding facility, we also intend to sort of do some part processing in house so that we can cut down on cost and can plan raw materials better.
Unidentified Participant
Got it? Got it, sir. That makes sense. That was all from my side. Thank you for taking my questions and best of luck, sir. Thanks.
operator
Thank you. The next question is from the line of Sai Saket from Meme Capital. Please proceed.
Unidentified Participant
Thanks for the opportunity again. So my question is with regard to management commentary in some of the earlier conference call, with regard to the seasonality aspect in the business particularly, I believe the comment was around sort of Q2 and Q4 being typically stronger or larger relative to Q1 and Q3. But with regards to sort of now the business mix sort of moving more and more towards heavy engineering. Where plates and where path do we do we see a sort of an opportunity to kind of rethink this as it sounds like the revenue visibility going forward will largely be dependent on execution base.
So do we think that the seasonality piece will continue going forward or with this change of it?
Prashant Garg — Chairman and Managing Director
So ultimately our goal is to get out of the seasonality and you know, get an order book and execution cycle sort of synced so that we can, you know, always be our maximum utilization and execution from our production facilities so that, you know, we get reliable sort of revenue numbers. But and you know, you can see that it also depends on the order mix and the timing of the order coming in. So our intention is to sort of try and have equal order book or you know, sort of similar levels of order book coming in so that the seasonality goes out.
Having said that, there is some seasonal element which will always be there because especially, you know, in and that depends on the major shutdowns that most of these process plants take. So rainy season is typically when it’s a lull period for them to sell in the market. And that is when major shutdowns of these plants happen. And that’s when the demand sort of momentarily spikes because all the customers especially doing operational capex or operational expenditure for maintenance and replacement of spare parts, that’s the time where the demand is the maximum because they want to carry out the maintenance during the lull period of their respective industries.
So that is when Q2 sort of kicks in. That is the time when Q1 ending and Q2 beginning. That’s when the maximum demand happens. But as you rightly pointed out we are moving away from just selling our consumables and getting into more engineered products, large industrial solutions. So that will sort of reduce the effect of seasonality but some effect will always be there.
Unidentified Participant
Understood, Got it. And a follow up to the earlier question I had with regard to the capacity expansion. Perhaps a bookkeeping question in the sense that do we see immediate surge in sort of depreciation aspect given the new tools and machines or is that within the more of a manageable range? In a sense that we would see a good sort of year over year uptake.
Prashant Garg — Chairman and Managing Director
So in the depreciation front there would be some spike in it because a large amount of capex will get capitalized in this quarter. So there would be some spike. That’s why we may have some impact on our pbt. But with the EBITDA margins it will see an improvement.
Unidentified Participant
Understood. Thank you very much.
operator
Thank you. So we take the next question. We would like to remind participants that you may press Star and one to ask a question. The next question is on the line of Vikrant Sahu from RK Advisors. Please proceed. Hello Mr. Vikrant, you may proceed with your question.
Unidentified Participant
Hello. Hello. Am I audible?
Prashant Garg — Chairman and Managing Director
Yes sir.
Unidentified Participant
Thanks for the opportunity sir. I just have few questions like how diversified is the diffusion engineers customer base today and has the customer concentration reduced compared to the last year?
Prashant Garg — Chairman and Managing Director
So our customer base is very diversified. I think the single biggest customer, it doesn’t account for even 20% of our turnover. I think it would be less than 15% so. And we have a large customer base with large proportion of repeat orders coming in. Does that answer your question?
Unidentified Participant
Yeah, yeah, I got it. And one more question. Over the medium term do you expect the company to grow faster than the core business due to a smaller base on converge for toward group average growth rate?
Prashant Garg — Chairman and Managing Director
Sorry, we could not understand your question. If you can just repeat it please. I cannot hear you.
Unidentified Participant
Over the medium term do we expect the company to grow faster than the core business due to the base of what we had currently or the growth towards the average growth rates.
Abhishek Mehta — Chief Financial Officier
So and that’s what the. I would say we have given our, I would say guidance also that we are expecting that we would be doing somewhere around 600 650cr in next three two to three years by 2728 to 2829. This is the pace at which we expect us to grow.
Prashant Garg — Chairman and Managing Director
So as a follow up question to his comment, can you please explain us when you say average growth rate with respect to core sector, which growth rate Are you referring to.
Unidentified Participant
Like, about the top line and the bottom line? Hello. So are you saying that are we growing faster than the welding industry, welding consumables industry, or the warehouse industry? Is that what your question is?
Abhishek Mehta — Chief Financial Officier
Yes. Yes.
Prashant Garg — Chairman and Managing Director
Yeah. So we expect to grow faster than the average growth rates that are visible in the vending consumables or the welding solutions industry. And that is what we’ve indicated before also in the comment.
Unidentified Participant
Okay. Okay. Got it, sir. Thank you so much for the answer, sir. I rejoined it.
Abhishek Mehta — Chief Financial Officier
Thank you.
operator
Thank you. We take that as the last question. I now hand the conference over to Mr. Prashant Garg, Chairman and Managing Director for Diffusion Engineers Ltd. For closing comments. Over to you, sir.
Prashant Garg — Chairman and Managing Director
Thank you all for your participation and insightful questions. As we move through FY26, we remain focused on execution, innovation and scaling sustainably. I would also like to express my gratitude, dedicated team members, valued clients, suppliers, bankers, and all of the stakeholders who continue to place their trust in us. For any further information, please feel free to connect with our investor relations team. Thank you and have a great evening ahead.
operator
Thank you. On behalf of Diffusion Engineers Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.