United DrillingQ4 FY23Industrial Manufacturing

United Drilling

Q4 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→Revenue for the current year expected around ₹200 crore with Q4 similar to Q3.
→Anticipated revenue growth of 30-40% for the next financial year (FY23).
→Medium-term target: revenue around ₹300-350 crore in the next 1-2 years.
→Long-term vision: revenue reaching about ₹600 crore in 3-4 years.
→Export contribution expected to grow to 20-40%, with a reasonable jump in export business from the second half of the coming year.
→New Mundra facility planned with ₹20-30 crore CAPEX, aiming to generate ₹500-600 crore revenue after 3-4 years.
→Continuous drilling operations with a 15-20% annual increase in wells drilled by companies like ONGC and Oil India.
→Development of new product lines like side pocket mandrels and connectors for both domestic and export markets.

Category 3

→Revenue growth visibility: Targeting 30-40% increase in revenues for FY23 compared to FY22 (~200 crores).
→Medium-term revenue goal: 300-350 crores in 1-2 years; around 600 crores in 3-4 years.
→Export contribution expected to rise to 35-40% within 3-4 years.
→Margin profile expected to remain stable across products in domestic and export markets.
→CAPEX: Approx. Rs. 20-30 crores for new Mundra facility, expected to generate 500-600 crores in revenue after 3-4 years.
→Sustained dividend payout: Historically around 20-21%, with potential for increase aligned with profits.
→Continued expansion into international markets and new product lines to support earnings growth.

Get access to all 5 sections — revenue, margin, fundraise, orderbook, and capex — for United Drilling and 1,400+ other companies.

→There is no explicit mention of any current or future fundraising through debt or equity in the provided transcript.
→The company is cash surplus and has not utilized any bank credit facility during the last three quarters.
→The board decides dividend payouts, and the company maintains around 20% dividend payout, balancing shareholder returns and growth investments.
→CAPEX plans include around Rs. 20-30 crores for new facilities like Mundra, funded presumably through internal accruals given the cash surplus status.
→No discussions or indications regarding raising funds through equity or debt issuance were mentioned for expansion or working capital.

Yes

→The current order backlog is approximately Rs. 70 crores as of the end of Q3.
→The company has bid for around Rs. 200 crores worth of new projects with different companies.
→It is expected that about 50% to 60% of these bids will convert into confirmed orders.
→Orders include a mix of domestic and export components, with around Rs. 3-4 crores from exports.
→The order book supports the company's revenue target of around Rs. 200 crores for the financial year.
→Discussions indicate continued order flow and potential for growth with new marketing tie-ups and expanded presence in international markets.

Yes

→United Drilling Tools is planning a new facility at Mundra, Gujarat, near Mundra Port.
→The Mundra facility's planned CAPEX is approximately Rs. 20 to 30 crores.
→Construction for the Mundra facility is expected to start soon and be ready for commercial use in about a year from the announcement date (February 2022).
→The facility aims to generate revenue potential of approximately Rs. 500 to 600 crores after 3 to 4 years of operation.
→The company has also invested significantly in R&D for high-realization products, contributing to current CAPEX.
→Additional strategic steps include expanding marketing representatives in countries like Libya, Vietnam, and Egypt to boost exports.
→The company is also registered for local approvals for the Mundra project and has secured land registration.

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