Any current/future new fundraising through debt or equity?

No specific mention of new fundraising through debt or equity in the current or near future. The company stated it is "fairly placed with our liquidity in hand," with "minimal debt equity" and is "net debt-free." Management expressed confidence that funding capacity will not be a constraint for growth or order conversions. Recent fundraising mentioned was the QIP of INR38.5 crores by Dolphin Offshore for refurbishing its barge asset. No additional plans for raising equity or debt were discussed during the call.

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

Deep Industries plans a capex of around INR100 crores for FY '24. Current capex includes the acquisition of two drilling rigs and a few gas processing packages. One rig is deployed at ONGC Bokaro, and the second will go to a client called Selan; both expected to start generating revenue in Q4 FY '24. Additional capex is ongoing for gas compression services contract at ONGC Geleki. Dolphin Offshore raised INR38.5 crores primarily for refurbishing a key barge asset to get it operational by January 2024. The company is refurbishing this barge to change its jurisdiction for tax efficiency, aiming

Future growth expectations in sales/revenue/volumes?

The company expects significant revenue growth starting Q3 and Q4 FY '24 due to order book conversion and new contracts commencing revenue. Order book stands at around INR1,190-1,200 crores with a typical three-year execution timeline. FY '25 revenue is anticipated to exceed INR500 crores, supported by ongoing order book and Dolphin Offshore revenues. The bidding pipeline is strong with about INR800 crores of tenders submitted, majority expected to convert in H2 FY '24. Dolphin Offshore asset expected to begin generating revenue from Q4 FY '24, with potential full-year revenue of INR90-100 cro

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

Deep Industries expects significant revenue growth starting Q3 and Q4 FY '24 due to order book conversion, with FY '25 revenues anticipated to exceed INR 500 crores. Order book growth is strong with INR 1,195 crores, a 47% YoY increase, and a healthy INR 800 crores bidding pipeline expected to convert mainly in H2 FY '24. EBITDA margins have been maintained above 40% historically, with confidence to sustain or improve margins going forward. Dolphin Offshore is expected to contribute revenues starting Q4 FY '24, with forecasted full-year revenues of INR 90-100 crores in FY '25, and higher EBITD

Current/ Expected Orderbook/ Pending Orders?

Current order book stands at around INR 1,190 to INR 1,200 crores, spanning more than 40 different contracts with an average execution timeline of about three years. The order book composition: approximately 45% gas compression, 39% rigs, and the remainder in integrated project management and gas dehydration. ONGC contributes around 65% of the order book, followed by Vedanta and Oil India. There is an additional bidding pipeline worth about INR 800 crores, mostly expected to convert in H2 FY24. Order inflows in H2 are anticipated to be strong and likely in line with or higher than H1. The comp

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Deep Industries LtdQ3 FY23Oil

Deep Industries Ltd Q3 FY23 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 2

Fundraise

Yes

Order

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company expects significant revenue growth starting Q3 and Q4 FY '24 due to order book conversion and new contracts commencing revenue.
→Order book stands at around INR1,190-1,200 crores with a typical three-year execution timeline.
→FY '25 revenue is anticipated to exceed INR500 crores, supported by ongoing order book and Dolphin Offshore revenues.
→The bidding pipeline is strong with about INR800 crores of tenders submitted, majority expected to convert in H2 FY '24.
→Dolphin Offshore asset expected to begin generating revenue from Q4 FY '24, with potential full-year revenue of INR90-100 crores in FY '25.
→Company expects to maintain EBITDA margins above 40% alongside revenue growth.
→Capex of INR100 crores planned for FY '24 to support growth including acquisition of drilling rigs and gas processing packages.

Margin guidance

Category 2

→Deep Industries expects significant revenue growth starting Q3 and Q4 FY '24 due to order book conversion, with FY '25 revenues anticipated to exceed INR 500 crores.
→Order book growth is strong with INR 1,195 crores, a 47% YoY increase, and a healthy INR 800 crores bidding pipeline expected to convert mainly in H2 FY '24.
→EBITDA margins have been maintained above 40% historically, with confidence to sustain or improve margins going forward.
→Dolphin Offshore is expected to contribute revenues starting Q4 FY '24, with forecasted full-year revenues of INR 90-100 crores in FY '25, and higher EBITDA margin (~60-70%) from its assets.
→Company is net debt-free with sufficient liquidity, ensuring no funding constraints for growth.
→Order inflows are expected to remain continuous and stable, unaffected by external factors like elections.
→Overall, management is bullish on earnings and operational profit growth driven by strong order book execution and new asset contributions.

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Fundraise plans

Yes

→No specific mention of new fundraising through debt or equity in the current or near future.
→The company stated it is "fairly placed with our liquidity in hand," with "minimal debt equity" and is "net debt-free."
→Management expressed confidence that funding capacity will not be a constraint for growth or order conversions.
→Recent fundraising mentioned was the QIP of INR38.5 crores by Dolphin Offshore for refurbishing its barge asset.
→No additional plans for raising equity or debt were discussed during the call.

Order book

→Current order book stands at around INR 1,190 to INR 1,200 crores, spanning more than 40 different contracts with an average execution timeline of about three years.
→The order book composition: approximately 45% gas compression, 39% rigs, and the remainder in integrated project management and gas dehydration.
→ONGC contributes around 65% of the order book, followed by Vedanta and Oil India.
→There is an additional bidding pipeline worth about INR 800 crores, mostly expected to convert in H2 FY24.
→Order inflows in H2 are anticipated to be strong and likely in line with or higher than H1.
→The company expects significant order book growth leading to top-line revenue growth from Q3 and Q4 onward.

Capex plans

Yes

→Deep Industries plans a capex of around INR100 crores for FY '24.
→Current capex includes the acquisition of two drilling rigs and a few gas processing packages.
→One rig is deployed at ONGC Bokaro, and the second will go to a client called Selan; both expected to start generating revenue in Q4 FY '24.
→Additional capex is ongoing for gas compression services contract at ONGC Geleki.
→Dolphin Offshore raised INR38.5 crores primarily for refurbishing a key barge asset to get it operational by January 2024.
→The company is refurbishing this barge to change its jurisdiction for tax efficiency, aiming for near-zero tax.
→No funding constraints anticipated as the company is net debt-free with good liquidity.
→Strategic acquisition: Dolphin Offshore, enabling quicker market access to offshore services and diversification.
→Ongoing investments in joint ventures; bids under evaluation with outcomes expected in coming months.

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