💰 Financial Performance

Revenue Growth by Segment

Total operating income grew by 6.02% YoY, reaching INR 98.19 Cr in FY25 compared to INR 92.61 Cr in FY24. Segment-specific growth for workover, drilling, and maintenance services is not individually broken down, but the overall increase is attributed to steady demand in oil and gas field services.

Geographic Revenue Split

The company is based in Ahmedabad, Gujarat, and primarily serves the Indian oil and gas sector. Specific percentage splits by region are not disclosed, though operations are concentrated around domestic oil fields.

Profitability Margins

Net Profit Margin improved to 1.87% in FY25 from 0.07% in FY24 due to better cost control. However, PBILDT margin saw a decline from 18.9% in FY24 to 10.3% in FY25. Return on Net Worth increased to 3.05% in FY25 from 0.61% in FY24.

EBITDA Margin

PBILDT (EBITDA) stood at INR 10.11 Cr in FY25, a significant 42.2% decrease from INR 17.50 Cr in FY24. This resulted in the EBITDA margin contracting from 18.9% to 10.3% YoY, primarily due to higher operational costs and lower EBIT.

Capital Expenditure

Property, Plant and Equipment (PPE) increased to INR 69.13 Cr as of September 30, 2025, from INR 61.35 Cr in March 2025, indicating a capital investment of approximately INR 7.78 Cr in the first half of FY26 to expand or maintain the rig fleet.

Credit Rating & Borrowing

The company's credit rating was downgraded in June 2025 to 'CARE BB+; Stable / CARE A4+' and moved to the 'ISSUER NOT COOPERATING' category. Previously, it held 'CARE BBB-; Stable / CARE A3' as of July 2024. Borrowing costs are impacted by this downgrade, though specific interest rates are not disclosed.

⚙️ Operational Drivers

Raw Materials

As a service provider, primary costs include equipment spares, fuel, and specialized consumables for drilling and workover rigs, representing a significant portion of the operating expenses.

Import Sources

Not specifically disclosed, but equipment and spares for oilfield services are typically sourced from domestic industrial hubs like Gujarat and Maharashtra or imported for specialized drilling components.

Capacity Expansion

The company maintains a fleet of rigs for workover and drilling services. PPE value grew 12.7% in H1 FY26 (from INR 61.35 Cr to INR 69.13 Cr), suggesting an expansion in service capacity or equipment upgrades.

Raw Material Costs

Operating expenses are driven by rig maintenance and personnel. While specific raw material costs are not listed, the PBILDT decline of 42.2% suggests a sharp rise in operating costs relative to revenue in FY25.

Manufacturing Efficiency

Efficiency is measured by rig utilization rates. The company reported improved operational efficiency in FY25, leading to higher operating margins of 4.61% compared to 0.11% in the prior year.

Logistics & Distribution

The company originated as 'Aakash Roadlines' in 2006, providing transportation services, which likely supports its current internal logistics for moving rigs between oil field sites.

📈 Strategic Growth

Expected Growth Rate

53%

Growth Strategy

Growth is targeted through the renewal of existing contracts and securing new ones to reach a Total Operating Income of over INR 150 Cr. Strategy includes leveraging extensive promoter experience in the oil & gas industry and maintaining a reputed customer base to minimize counterparty risk.

Products & Services

Workover services, drilling services, well and wellhead maintenance services, oil enhanced recovery services, and oil & gas compression services.

Brand Portfolio

Aakash Exploration Services Limited (AESL).

New Products/Services

The company continues to focus on production-stage services like oil enhanced recovery, which are critical for maintaining output in maturing oil fields.

Market Expansion

The company is focused on the Indian oil and gas sector, particularly production-stage services which offer more stable demand than pure exploration.

🌍 External Factors

Industry Trends

The industry is evolving towards enhanced oil recovery (EOR) as existing fields mature. AESL is positioned in this segment, but faces competition and volatility in day rates which can fluctuate based on global energy demand.

Competitive Landscape

Operates in a highly competitive oil & gas services industry with several players bidding for contracts from major PSUs and private explorers.

Competitive Moat

The moat is built on extensive promoter experience (since 2006) and a reputed customer base with lower counterparty risk. This is sustainable as long as the company maintains its technical certification and rig safety records.

Macro Economic Sensitivity

Highly sensitive to global crude oil prices, which dictate the capital expenditure and service demand from major oil producers.

Consumer Behavior

Not applicable as the company is a B2B service provider to oil and gas producers.

Geopolitical Risks

Geopolitical tensions affecting oil prices directly impact the demand for oilfield services and the cost of imported rig components.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to stringent safety and environmental regulations governing oil and gas field services, including rig safety standards and waste management during drilling.

Taxation Policy Impact

The company follows Indian Accounting Standards (Ind AS). Income Tax Assets (Net) stood at INR 2.04 Cr as of September 2025.

Legal Contingencies

The company has an unmodified report on financial statements for FY24, and management declared no fraudulent or illegal transactions occurred during the year.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'Issuer Not Cooperating' status with CARE Ratings, which could restrict access to capital. Additionally, non-renewal of existing contracts could lead to a revenue decline below INR 75 Cr.

Geographic Concentration Risk

Operations are heavily concentrated in India, specifically within regions with active oil and gas production like Gujarat.

Third Party Dependencies

High dependency on major oil and gas producers for contract awards; a loss of a single major client could significantly impact the 10.3% PBILDT margin.

Technology Obsolescence Risk

Risk of rigs becoming technologically obsolete compared to newer, more efficient automated drilling systems entering the market.

Credit & Counterparty Risk

The company benefits from a 'reputed customer base' which lowers counterparty risk, though the Debtors Turnover Ratio of 4.25 suggests a need for active receivable management.