Any current/future new fundraising through debt or equity?

The company has taken some debt for the refurbishment of the Prabha barge, with the balance funded through internal accruals. Interest costs have increased due to new debt taken. The company is maintaining liquidity and a strong cash position (over ₹150 crore in cash and liquid investments) to capitalize on acquisition opportunities such as Dolphin Offshore and Kandla Energy & Chemicals. There is a strategic focus on being cash-rich to fund future acquisitions and asset purchases rather than immediately seeking new large-scale fundraising. No explicit mention of any new or planned larg

Any current/future capex/capital investment/strategic investment?

Planned CAPEX for the current year is around ₹150 crore, with about ₹100 crore already in process (Page 8). The CAPEX mainly includes buying 3 new rigs to meet full asset utilization in drilling and rig services (Page 8). Investment of around $11 to $13 million has been made in refurbishing the Prabha barge, with some pending minor costs (Pages 5, 11). There is a small strategic investment of around ₹2 crore in acquiring Kandla Energy and Chemicals, a company under liquidation, to explore synergies in chemical manufacturing for drilling (Pages 7, 13). The company is open to evaluating other ac

Future growth expectations in sales/revenue/volumes?

The company expects over 20-25% year-on-year growth in standalone sales (Page 9). Strong bidding pipeline and consistent new order flows are driving robust revenue growth (Page 3). Execution of current order book of Rs. 1246 crore will continue to contribute over the next 2.5 years (Page 12). New contracts from ONGC worth approximately Rs. 140 crore support revenue growth (Page 3). Commercialization of new rigs is expected in next 4-6 months, adding to capacity (Page 13). Dolphin Offshore's refurbished assets (barge Prabha and DSV) expected to contribute to revenue from Q3 onwards, with Dolphi

Future growth expectations in earnings/operating earnings/profits/EPS?

Consolidated revenue from operations rose by 22% in Q1FY25, with strong order execution and consistent new orders. EBITDA grew by 26.4%, with margins maintained between 42% to 45%, supporting robust cash flows. Net profit increased by 25% year-on-year in Q1FY25, with a PAT margin of 28.8%. Order book stands at Rs. 1246 crore, 12% higher than Q1FY24, indicating strong future revenue visibility. Firm orders for 3 new rigs expected to commercialize within 4-6 months, driving future growth. Dolphin Offshore expected to contribute Rs. 70-80 crore this year, growing to Rs. 100+ crore next year with

Current/ Expected Orderbook/ Pending Orders?

Current order book stands at approximately Rs. 1246 crore, stable compared to mid-last year. This order book excludes Dolphin Offshore orders. Orders are expected to be executed over the next 2.5 to 3 years. Robust bidding pipeline with substantial bids submitted; awards expected in next 1-2 quarters. Recent orders include contracts from ONGC worth around Rs. 140 crore. Dolphin Offshore order book will be reported separately going forward; includes barge and other vessel contracts. Continuous inflow of new orders balances execution, keeping order book stable but poised for growth. Evaluating o

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Deep Industries LtdQ2 FY24Oil

Deep Industries Ltd Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹475P/E: 7.7Market Cap: ₹2.9K CrSector: Oil

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company expects over 20-25% year-on-year growth in standalone sales (Page 9).
→Strong bidding pipeline and consistent new order flows are driving robust revenue growth (Page 3).
→Execution of current order book of Rs. 1246 crore will continue to contribute over the next 2.5 years (Page 12).
→New contracts from ONGC worth approximately Rs. 140 crore support revenue growth (Page 3).
→Commercialization of new rigs is expected in next 4-6 months, adding to capacity (Page 13).
→Dolphin Offshore's refurbished assets (barge Prabha and DSV) expected to contribute to revenue from Q3 onwards, with Dolphin revenue expected to grow significantly (Pages 3, 9, 11).
→The company is evaluating similar opportunities in offshore services to expand revenue streams (Pages 5, 6).
→Overall, management is optimistic about robust bidding pipeline with awards expected in 1-2 quarters, supporting steady growth (Page 6).

Margin guidance

Category 3

→Consolidated revenue from operations rose by 22% in Q1FY25, with strong order execution and consistent new orders.
→EBITDA grew by 26.4%, with margins maintained between 42% to 45%, supporting robust cash flows.
→Net profit increased by 25% year-on-year in Q1FY25, with a PAT margin of 28.8%.
→Order book stands at Rs. 1246 crore, 12% higher than Q1FY24, indicating strong future revenue visibility.
→Firm orders for 3 new rigs expected to commercialize within 4-6 months, driving future growth.
→Dolphin Offshore expected to contribute Rs. 70-80 crore this year, growing to Rs. 100+ crore next year with over 50% EBITDA margins.
→Standalone operations anticipate 20-25% year-on-year sales growth.
→Robust bidding pipeline and favorable macroeconomic conditions suggest sustained growth.
→Target ROCE is 14-16% as assets get commercialized and capital employed optimizes returns.

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Fundraise plans

Yes

→The company has taken some debt for the refurbishment of the Prabha barge, with the balance funded through internal accruals.
→Interest costs have increased due to new debt taken.
→The company is maintaining liquidity and a strong cash position (over ₹150 crore in cash and liquid investments) to capitalize on acquisition opportunities such as Dolphin Offshore and Kandla Energy & Chemicals.
→There is a strategic focus on being cash-rich to fund future acquisitions and asset purchases rather than immediately seeking new large-scale fundraising.
→No explicit mention of any new or planned large equity fundraising in the near term.
→The firm is cautious with cash management to be able to act quickly on acquiring better assets when opportunities arise.

Order book

Yes

→Current order book stands at approximately Rs. 1246 crore, stable compared to mid-last year.
→This order book excludes Dolphin Offshore orders.
→Orders are expected to be executed over the next 2.5 to 3 years.
→Robust bidding pipeline with substantial bids submitted; awards expected in next 1-2 quarters.
→Recent orders include contracts from ONGC worth around Rs. 140 crore.
→Dolphin Offshore order book will be reported separately going forward; includes barge and other vessel contracts.
→Continuous inflow of new orders balances execution, keeping order book stable but poised for growth.
→Evaluating opportunities beyond current assets, including refurbishment and acquisition of vessels.

Capex plans

Yes

→Planned CAPEX for the current year is around ₹150 crore, with about ₹100 crore already in process (Page 8).
→The CAPEX mainly includes buying 3 new rigs to meet full asset utilization in drilling and rig services (Page 8).
→Investment of around $11 to $13 million has been made in refurbishing the Prabha barge, with some pending minor costs (Pages 5, 11).
→There is a small strategic investment of around ₹2 crore in acquiring Kandla Energy and Chemicals, a company under liquidation, to explore synergies in chemical manufacturing for drilling (Pages 7, 13).
→The company is open to evaluating other acquisition opportunities, especially second-hand equipment for Dolphin Offshore, though exact numbers depend on market availability (Page 5).
→The firm maintains high liquidity (~₹150 crore cash and liquid investments) to be agile for future acquisitions (Page 7).
→They are exploring opportunities in emerging areas like hydrogen but it is premature for concrete investments (Page 6).

How does Deep Industries Ltd rank vs peers in Oil?

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