Current/ Expected Orderbook/ Pending Orders?

The current order book position as of 30th June 2024 is approximately Rs. 2000 crores. The rig "Jindal Supreme," currently under refurbishment, is expected to be redeployed in Q3 FY25 with an operating day rate of $88,859. There is optimism about redeployment of rigs and future contracts despite some earlier ONGC contract cancellations. The company is awaiting regulatory approvals for acquisition and contract assignment of the rig "Jindal Pioneer," which will add to the order book upon completion. No explicit timeline for new ONGC tenders was provided, but demand is expected to increas

Any current/future new fundraising through debt or equity?

As per the transcript, there is no mention of any current or planned fundraising through debt or equity. The company continues to maintain a net cash position, which improved to Rs. 68 crores as of 30th June 2024. One term loan was fully repaid on 31st May 2024 using internal accruals. Both joint venture companies are debt-free, and no new debt drawdowns are reported. Management indicated no changes in depreciation methods or indications of raising capital. Focus is on improving operational earnings and acquiring rigs within financial feasibility without needing external fundraising. No refere

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

Jindal Drilling is in the final stage of acquiring the rig "Jindal Pioneer" from a joint venture company; approval from statutory authorities is pending. Post-acquisition, the contract for Jindal Pioneer will be assigned to Jindal Drilling, expected to improve earnings immediately. The rig "Jindal Supreme" is under refurbishment, expected to redeploy in Q3 FY25 at a higher operating day rate ($88,859). The Company continues to look at acquiring rigs that match ONGC's specifications but currently finds none financially feasible. No specific future capex or other strategic capital investments we

Future growth expectations in sales/revenue/volumes?

Revenue increased 86% in Q1 FY25 compared to Q1 FY24, indicating strong growth momentum. Earnings expected to revive from Q3 FY25 as the rig Jindal Supreme under refurbishment will be redeployed at a higher operating day rate ($88,859). Acquisition of Jindal Pioneer rig from JV pending approval will add to revenue once contract assigned, expected to continue till Dec 2025. Contracts with ONGC likely to resume post-monsoon with potential for new rig deployments. Demand for rigs remains strong due to government’s intention to increase oil production by deploying more rigs. Private sector rig con

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

Earnings expected to improve from Q3 FY25 onwards with redeployment of the rig Jindal Supreme at a higher operating day rate (~$88,859). Acquisition of the rig Jindal Pioneer from JV, upon regulatory approval, will positively impact earnings immediately. Revenue to revive as the rig under refurbishment (Jindal Supreme) resumes operations. Normalized quarterly earnings (JV profit + standalone) estimated around Rs. 40 crore with some cushion for exchange fluctuations. EBITDA margins typically expected between 30% to 35% when all rigs operational; owned rigs generate higher margins than rented on

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Jindal Drilling & Industries LtdQ2 FY24Oil

Jindal Drilling & Industries Ltd Q2 FY24 Earnings Call Analysis

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

Price: ₹566P/E: 7.1Market Cap: ₹1.7K CrSector: Oil

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Revenue increased 86% in Q1 FY25 compared to Q1 FY24, indicating strong growth momentum.
→Earnings expected to revive from Q3 FY25 as the rig Jindal Supreme under refurbishment will be redeployed at a higher operating day rate ($88,859).
→Acquisition of Jindal Pioneer rig from JV pending approval will add to revenue once contract assigned, expected to continue till Dec 2025.
→Contracts with ONGC likely to resume post-monsoon with potential for new rig deployments.
→Demand for rigs remains strong due to government’s intention to increase oil production by deploying more rigs.
→Private sector rig contracts are smaller and shorter; company continues to focus on long-term ONGC contracts for stable revenue.
→Overall, growing order book and redeployment of rigs at higher day rates underpin positive future sales and volume growth.

Margin guidance

Category 3

→Earnings expected to improve from Q3 FY25 onwards with redeployment of the rig Jindal Supreme at a higher operating day rate (~$88,859).
→Acquisition of the rig Jindal Pioneer from JV, upon regulatory approval, will positively impact earnings immediately.
→Revenue to revive as the rig under refurbishment (Jindal Supreme) resumes operations.
→Normalized quarterly earnings (JV profit + standalone) estimated around Rs. 40 crore with some cushion for exchange fluctuations.
→EBITDA margins typically expected between 30% to 35% when all rigs operational; owned rigs generate higher margins than rented ones.
→Despite short-term dips due to contract completions or rigs under refurbishment, medium-term outlook stays positive based on stable or improved day rates and contract renewals.
→Cautious optimism about future ONGC tenders and contract renewals supporting growth.

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Fundraise plans

→As per the transcript, there is no mention of any current or planned fundraising through debt or equity.
→The company continues to maintain a net cash position, which improved to Rs. 68 crores as of 30th June 2024.
→One term loan was fully repaid on 31st May 2024 using internal accruals.
→Both joint venture companies are debt-free, and no new debt drawdowns are reported.
→Management indicated no changes in depreciation methods or indications of raising capital.
→Focus is on improving operational earnings and acquiring rigs within financial feasibility without needing external fundraising.
→No references to equity issuance or plans for raising money via share sales were discussed.

Order book

Yes

→The current order book position as of 30th June 2024 is approximately Rs. 2000 crores.
→The rig "Jindal Supreme," currently under refurbishment, is expected to be redeployed in Q3 FY25 with an operating day rate of $88,859.
→There is optimism about redeployment of rigs and future contracts despite some earlier ONGC contract cancellations.
→The company is awaiting regulatory approvals for acquisition and contract assignment of the rig "Jindal Pioneer," which will add to the order book upon completion.
→No explicit timeline for new ONGC tenders was provided, but demand is expected to increase post-monsoon.
→The company maintains a strategic focus on longer-term contracts (3 to 5 years) primarily with ONGC rather than private players who prefer shorter contracts.

Capex plans

Yes

→Jindal Drilling is in the final stage of acquiring the rig "Jindal Pioneer" from a joint venture company; approval from statutory authorities is pending.
→Post-acquisition, the contract for Jindal Pioneer will be assigned to Jindal Drilling, expected to improve earnings immediately.
→The rig "Jindal Supreme" is under refurbishment, expected to redeploy in Q3 FY25 at a higher operating day rate ($88,859).
→The Company continues to look at acquiring rigs that match ONGC's specifications but currently finds none financially feasible.
→No specific future capex or other strategic capital investments were announced; focus remains on rig acquisition and refurbishment for operational efficiency and revenue growth.

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