Diamond Power: ₹3,688 cr orders, but 100x earnings

Diamond Power Infrastructure Limited (NSE: DIACABS) doubled its revenue last quarter and holds a ₹3,688 crore order book. The stock has tripled in a year. What happened Q1 FY27 revenue rose 129% to ₹690 crore. EBITDA grew 172% to ₹85 crore, with margin at 12.3%. Net profit jumped 191% to ₹58.5 crore. The order book stood at ₹3,688 crore on 11 August, close to two years of FY26 sales. Management guides FY27 revenue of ₹4,300 to ₹4,500 crore at 11% to 13% margin. A fresh ₹179 crore order came from Adani Electricity. Why it matters Data centres, transmission lines and smart meters all need cables and conductors. Diamond Power makes them. The company also raised ₹1,640 crore through a QIP, using ₹750 crore for working capital and ₹350 crore to repay promoter debt. That turned net worth positive at ₹691 crore. My view The business is real. The price is the problem. At ₹376, the stock trades near 105 times trailing earnings. Suppose the company hits the top of its guidance and profit reaches ₹300 crore this year. That still leaves it above 70 times. The market has priced in three good years. Two risks sit under the surface. First, tax is near zero because of carried forward losses from the insolvency days. That fades in two years, and reported profit takes the hit. Second, margins of 12% leave little room if copper and aluminium prices rise. What I am watching Q2 FY27 results in mid-November. I want margin held above 12% and the export order book moving toward the ₹500 crore target. On the chart, ₹398 is the recent high and ₹300 is where the trend gets tested. My stance: Don't chase. Let the price catch up with profits. Revisit near ₹300. Disclosure: I do not hold a position in Diamond Power Infrastructure Limited at the time of writing. This is not investment advice.