Deep Industries Ltd Q4 FY26 Earnings Analysis

- Deep Industries is confident of strong future revenue growth, targeting over 30-35% growth for FY '27 based on existing order book (Page 13). - Similar growth rates are expected in the subsequent year, subject to new order inflows (Page 13). - The Production Enhancement Contract (PEC) project is expected to ramp up steadily, reaching above INR150 crores annual revenue by FY '27-'28 (Pages 6 and 12). - Offshore business and new rigs/assets deployment contribute to diversified growth (Page 6). - The order book remains strong at around INR2,967 crores with a bidding pipeline of approximately INR800 crores, ensuring a steady flow of orders (Page 5). - Expansion into new verticals like carbon capture, biogas, and hydrogen is under evaluation, potentially providing new growth avenues (Page 14). - The company expects minimal impact on growth and capex despite pausing the QIP, relying on internal accruals and manageable debt levels for funding (Pages 13-15).

- Deep Industries expects revenue growth of over 30-35% for FY '27 and similar growth in the following year, driven by a robust order book and regular tender wins. - The Production Enhancement Contract (PEC) is anticipated to ramp up to INR 150 crores annually by FY '27-'28, contributing increasingly to revenues. - Q3 FY '26 saw a 49.8% YoY net profit growth and 46.3%-47.6% EBITDA margins, indicating strong profitability maintained. - Management is confident about sustaining EBITDA margins between 46% to 48%, with strong operating cash flow supporting future growth. - Pricing improvements and volume growth both contribute to earnings expansion. - Acquisition opportunities and new contracts are being evaluated to enhance long-term value but are not yet finalized. - Overall focus remains on disciplined execution, asset reliability, and capital efficiency to sustain earnings growth.

- Regular capex for gas processing plants and rigs is being funded through internal accruals and loans, with comfortable debt levels allowing some increase in borrowing. - PEC (Production Enhancement Contract) capex around INR 160 crores will be funded through accruals and debt. - Acquisition plans (like Dolphin targets) may differ and could potentially shift to the next year; funding for acquisitions may involve waiting for QIP or using debt. - QIP (Qualified Institutional Placement) process is currently paused but not expected to impact growth or capex plans as internal cash generation and debt capacity are sufficient. - Minor capex is involved in new business areas like carbon capture utilization and storage (CCUS), but nothing major yet. - The company is actively exploring strategic investments, including in CCUS, compressed biogas, and hydrogen segments, but no firm commitments at this stage.

- The QIP (Qualified Institutional Placement) planned by Deep Industries Limited has been paused and is not proceeding currently. - Regular capex for gas processing plants and rigs will be funded through internal accruals and loans, as the company is comfortable increasing its currently low debt within limits. - For the Production Enhancement Contract (PEC) capex, funding will also come through internal accruals and debt. - Acquisition plans may differ or be postponed to the next year; there is no specific mention of funding these via QIP or debt at this moment. - The management expressed confidence in managing growth and capex without the QIP, leveraging cash generation and debt raising capacity as needed.

- As of February 6, 2026, Deep Industries Limited's order book stood at approximately INR 2,967 crores, providing strong revenue visibility for upcoming quarters. - The bidding pipeline is around INR 800 crores tentatively; however, amounts may vary. - Success rate for bids varies by vertical, with some verticals having success rates exceeding 50%. - Regular tenders are being floated by oil and gas producers, including ONGC, and the company is consistently bidding and securing orders. - There was a slight dip in order wins in the recent quarter (~INR 140 crores) compared to previous quarters (INR 200-300 crores), expected to spill over into Q4. - The company anticipates good conversions in Q4 based on tenders submitted, with some tenders where they are L1 (leading bidder).