DUCON - Ducon Tech

📊 NSE: DUCON 🏢 Engineering - Turnkey Services 📅 Last Updated: 12/13/2025 21:41

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 7.61% YoY to INR 450.63 Cr in FY2025 from INR 418.76 Cr in FY2024. Growth was primarily driven by the core Flue Gas Desulfurization (FGD) systems segment through timely order book execution.

Geographic Revenue Split

Primary operations are in the Indian subcontinent, with international presence through Ducon Combustion Equipment Inc. in New York, USA. The company is also expanding into Southeast Asia.

Profitability Margins

Operating margins improved to 6.59% in FY2025 from 5.07% in FY2024 due to enhanced operational efficiency and prudent cost management. Net income margins are expected to rise as fixed costs remain stable relative to revenue growth.

EBITDA Margin

Operating margin stood at 6.59% in FY2025, representing a 152 basis point improvement YoY from 5.07% in FY2024.

Capital Expenditure

Purchase of fixed assets, including intangible assets and CWIP, amounted to INR 0.35 Cr in FY2025, compared to INR 0.00 Cr in FY2024.

Credit Rating & Borrowing

Acuité downgraded and subsequently withdrew the credit rating on November 17, 2025. Interest coverage ratio improved to 2.91x in FY2025 from 2.21x in FY2024. Borrowing costs are approximately 10.7% based on finance costs of INR 10.81 Cr on total borrowings of INR 101.59 Cr.

⚙️ Operational Drivers

Raw Materials

Steel structures, DeNOx catalysts (3-year lifespan), limestone for scrubbing, and IT hardware components represent the primary material costs.

Import Sources

Sourced from India and the USA (via Ducon Technologies Inc. synergy).

Capacity Expansion

The company has completed over 30,000 projects since inception. Current focus is on executing the FGD order book for utilities and refineries.

Raw Material Costs

Operating costs (including raw materials) were INR 399.29 Cr, representing 88.6% of total revenue in FY2025.

Manufacturing Efficiency

Improved operational efficiency and prudent cost management contributed to a 1.52% increase in operating margins.

Logistics & Distribution

Other expenses, including distribution and general costs, stood at INR 13.64 Cr (3.0% of revenue) in FY2025.

📈 Strategic Growth

Expected Growth Rate

7.60%

Growth Strategy

Growth will be achieved through the execution of the massive FGD market in India (estimated at hundreds of billions of dollars), expansion into Southeast Asia, and leveraging the US parent company's technology for diversified combustion and power products.

Products & Services

Flue Gas Desulfurization (FGD) systems, material handling systems, waste incineration systems, power transmission products, steam and power turbines, and IT hardware.

Brand Portfolio

Ducon

New Products/Services

New offerings include steam and power turbines, heat recovery steam generators, and cogeneration plants using gas and biomass fuels through the DCE subsidiary.

Market Expansion

Targeting Southeast Asia and the Indian subcontinent for air pollution control and bulk material handling projects.

Market Share & Ranking

Prominent position in the Indian FGD sector; claims to be the leading company with the most experience in India for FGD technology.

Strategic Alliances

Synergy with Ducon Technologies Inc. (USA) and a merger phase for Ducon Technologies India Pvt. Ltd.

🌍 External Factors

Industry Trends

The FGD industry is growing rapidly due to strict environmental mandates in India. The market size is estimated in hundreds of billions of dollars, with recurring revenue from DeNOx catalysts every 3 years.

Competitive Landscape

Key competitors include global players such as Mitsubishi and Alstom.

Competitive Moat

Moat consists of a 30-year brand legacy, 30,000+ completed projects, and a client list featuring nearly every Fortune 500 company. This is sustainable due to high technical barriers in custom-engineered environmental systems.

Macro Economic Sensitivity

Highly sensitive to environmental regulations and government mandates regarding industrial pollution control (FGD norms).

Consumer Behavior

Shift toward sustainable industrial practices and compliance with global emission standards is driving demand for Ducon's core products.

Geopolitical Risks

Trade barriers or regulatory shifts in Southeast Asia could impact regional expansion plans.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily influenced by SEBI Regulation 30 and 33 for disclosures and Indian Accounting Standard 109 for financial reporting.

Environmental Compliance

Core business is built on helping clients meet environmental compliance; however, the company must adhere to manufacturing standards and pollution norms.

Taxation Policy Impact

Effective tax rate was approximately 37.7% in FY2025, with direct taxes paid of INR 7.31 Cr on PBT of INR 19.38 Cr.

⚠️ Risk Analysis

Key Uncertainties

Working capital intensity and project execution delays could impact cash flows by over 20% given the negative operating cash flow of INR 28.21 Cr in FY2025.