Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or future fundraising through debt or equity in the provided transcript from the call on page 18 or surrounding pages. The company discusses ongoing capital expenditures (capex) related to expansion like the Mundra and Kandla plants, with estimated capex around Rs.30-45 Crores. The increased loans and advances in cash flow are attributed to payments related to land and assets for these projects, not new fundraising. The company appears to be funding expansions through internal accruals and existing financial resources rather than raising new equity o

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

Construction of Kandla/Mundra plant is underway, expected to be completed by March 31, 2022, to double production capacity to ~300 Crores revenue. Total Mundra plant capex estimated around 30-45 Crores (initially 30 Crores plus potential additional 10-15 Crores). Purchased new corporate office in Noida, located in a high-rise building by Supertech; asset worth about 14 Crores under CWIP. Discussions ongoing for inorganic acquisitions in Europe to gain direct entry into international markets, though still at early stages. Aim to scale production capacity significantly to support targeted revenu

Future growth expectations in sales/revenue/volumes?

The company expects a revenue growth of around 35% to 40% in FY2023 driven by higher crude oil prices and increased inquiries both domestically and internationally. Expansion of capacity with new plants in Mundra and Kandla aims to double capacity to around 300 Crores, supporting higher sales volumes. Export revenues are targeted at 15% to 20% of total revenue in FY2023, with focus on markets like Middle East (Egypt, Libya, UAE), Vietnam, Russia, and South America. Bid pipeline has increased from around 100 Crores to 300 Crores for FY2023, with a conversion rate of 50% to 60% domesticall

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

United Drilling Tools expects revenue growth of 35% to 40% in FY2023, driven by strong domestic and international demand fueled by higher crude prices and increased inquiries. EBITDA margins are anticipated to maintain or improve from current levels, historically ranging sustainably between 35% and 45%. Profit After Tax (PAT) margin improved to 30.26% in FY2022 from 22% the previous year, indicating profitability growth; further growth is anticipated with revenue expansion. Earnings Per Share (EPS) rose to 24.8 in FY2022 from 15.09 the previous year, with expectations of sustained upward

Current/ Expected Orderbook/ Pending Orders?

The company has submitted bids totaling ₹300 Crores for FY2023. Out of these bids, around ₹200 Crores pertain to the domestic market and ₹100 Crores to exports. The expected conversion rate for submitted bids is approximately 20% to 30%. Confirmed orders currently stand at ₹100 Crores, split between domestic and export markets (exact split not specified). Export orders are increasing, supported by recently appointed marketing representatives in various countries. Orders have shorter lead times, around 4 to 6 weeks, but manufacturing turnaround is 4 to 6 months, leading to higher inve

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United DrillingQ1 FY22Industrial Manufacturing

United Drilling Q1 FY22 Earnings Call Analysis

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

Price: ₹227P/E: 24.5Market Cap: ₹440 CrSector: Industrial Manufacturing

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→The company expects a revenue growth of around 35% to 40% in FY2023 driven by higher crude oil prices and increased inquiries both domestically and internationally.
→Expansion of capacity with new plants in Mundra and Kandla aims to double capacity to around 300 Crores, supporting higher sales volumes.
→Export revenues are targeted at 15% to 20% of total revenue in FY2023, with focus on markets like Middle East (Egypt, Libya, UAE), Vietnam, Russia, and South America.
→Bid pipeline has increased from around 100 Crores to 300 Crores for FY2023, with a conversion rate of 50% to 60% domestically and 20% to 30% in exports, indicating order book expansion.
→The company is also considering inorganic growth through potential acquisitions in Europe to gain market access.
→Growth is expected across all product lines, with increased repeat orders and better market penetration due to new marketing representatives abroad.

Margin guidance

Category 3

→United Drilling Tools expects revenue growth of 35% to 40% in FY2023, driven by strong domestic and international demand fueled by higher crude prices and increased inquiries.
→EBITDA margins are anticipated to maintain or improve from current levels, historically ranging sustainably between 35% and 45%.
→Profit After Tax (PAT) margin improved to 30.26% in FY2022 from 22% the previous year, indicating profitability growth; further growth is anticipated with revenue expansion.
→Earnings Per Share (EPS) rose to 24.8 in FY2022 from 15.09 the previous year, with expectations of sustained upward momentum corresponding with revenue and profit growth.
→Capacity expansions (especially the Mundra and Kandla plants) are planned to double production capacity to about ₹300 Crores, supporting revenue scale-up without proportionate cost rise.
→Ongoing efforts to increase international market penetration, including appointing marketing representatives and potential acquisitions in Europe, are expected to contribute to growth.

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Fundraise plans

→There is no explicit mention of any current or future fundraising through debt or equity in the provided transcript from the call on page 18 or surrounding pages.
→The company discusses ongoing capital expenditures (capex) related to expansion like the Mundra and Kandla plants, with estimated capex around Rs.30-45 Crores.
→The increased loans and advances in cash flow are attributed to payments related to land and assets for these projects, not new fundraising.
→The company appears to be funding expansions through internal accruals and existing financial resources rather than raising new equity or debt at this stage.
→Management does not mention plans to raise new capital or refinance existing borrowings during the call.

Order book

Yes

→The company has submitted bids totaling ₹300 Crores for FY2023.
→Out of these bids, around ₹200 Crores pertain to the domestic market and ₹100 Crores to exports.
→The expected conversion rate for submitted bids is approximately 20% to 30%.
→Confirmed orders currently stand at ₹100 Crores, split between domestic and export markets (exact split not specified).
→Export orders are increasing, supported by recently appointed marketing representatives in various countries.
→Orders have shorter lead times, around 4 to 6 weeks, but manufacturing turnaround is 4 to 6 months, leading to higher inventory levels to meet quick delivery demands.
→Internationally, bids face competition from 2-4 players typically, with expanding reach into regions like South America, Middle East, Egypt, Libya, Vietnam, Russia, and UAE.

Capex plans

Yes

→Construction of Kandla/Mundra plant is underway, expected to be completed by March 31, 2022, to double production capacity to ~300 Crores revenue.
→Total Mundra plant capex estimated around 30-45 Crores (initially 30 Crores plus potential additional 10-15 Crores).
→Purchased new corporate office in Noida, located in a high-rise building by Supertech; asset worth about 14 Crores under CWIP.
→Discussions ongoing for inorganic acquisitions in Europe to gain direct entry into international markets, though still at early stages.
→Aim to scale production capacity significantly to support targeted revenue growth (up to 300 Crores) with current and planned capex.

How does United Drilling rank vs peers in Industrial Manufacturing?

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