DEEPINDS - Deep Industries

📊 NSE: DEEPINDS 🏢 Oil Drilling / Allied Services 📅 Last Updated: 12/13/2025 21:27

💰 Financial Performance

Revenue Growth by Segment

The company expects a consolidated revenue growth of 35% to 38% YoY for FY27, driven by Production Enhancement Contracts (PEC) and new rig additions. Dolphin Offshore is targeted to contribute INR 100 Cr to the top line in FY26, with further growth expected as new assets are added.

Geographic Revenue Split

Operations are primarily concentrated in India, with active deployments in the Rajahmundry asset, Rajasthan, Assam, and Arunachal Pradesh hydrocarbon basins.

Profitability Margins

Consolidated EBITDA margins have remained stable between 43% and 45%. Standalone margins (excluding other income) were approximately 37% over the last three quarters, with management targeting an improvement to 40% as PEC volumes increase.

EBITDA Margin

Consolidated EBITDA margin is currently 43-45%, with guidance suggesting an upward trajectory beyond 45% in coming quarters due to the deployment of higher-margin new assets.

Capital Expenditure

The company is aggressively adding new assets to its fleet to service running contracts. Long-term bank facilities were enhanced from INR 138.62 Cr to INR 205.69 Cr to support this expansion and asset deployment.

Credit Rating & Borrowing

CARE Ratings upgraded the long-term rating to CARE A+; Stable (from CARE A; Positive) in September 2024. Short-term facilities are rated CARE A1.

⚙️ Operational Drivers

Raw Materials

As a service provider, primary operational costs are driven by specialized equipment: Gas Compression Rigs (15-20% of costs), Workover Rigs, and Gas Dehydration units. Consumables and spares for these assets represent the primary material cost.

Import Sources

Equipment and specialized spares are sourced globally and domestically, with significant operations and asset deployment across Gujarat, Rajasthan, and North-Eastern states like Assam.

Key Suppliers

Not explicitly named, but procurement involves global oilfield equipment manufacturers and domestic engineering firms for rig components.

Capacity Expansion

Current order book stands at INR 3,050 Cr as of June 30, 2025, a significant increase from INR 1,246 Cr in June 2024. Expansion includes the takeover of the Rajahmundry PEC asset and new workover rig deployments for Oil India.

Raw Material Costs

Direct operating expenses are linked to asset maintenance and mobilization. Management aims to improve standalone margins from 37% to 40% by increasing the volume of production enhancement projects.

Manufacturing Efficiency

Efficiency is measured by the 'efficient deployment of large asset base' and maintaining safety standards across all sites to prevent operational downtime.

Logistics & Distribution

Distribution costs relate to the mobilization of heavy rigs across difficult terrains in Rajasthan and the North-East; specific INR values are not disclosed.

📈 Strategic Growth

Expected Growth Rate

35-38%

Growth Strategy

Growth will be achieved through full-year revenue contributions from newly added rigs, the scaling of Dolphin Offshore (targeting INR 100 Cr), and the execution of the INR 3,050 Cr order book. The company is also shifting toward high-value Production Enhancement Contracts (PEC) and integrated gas processing facilities.

Products & Services

Gas compression services, workover rigs, drilling rigs, gas dehydration services, production enhancement contracts, and integrated gas processing facilities.

Brand Portfolio

Deep Industries Limited, Dolphin Offshore.

New Products/Services

Expansion into integrated gas processing facilities and unconventional resource development; these are expected to contribute to the targeted 35-38% growth.

Market Expansion

Deepening footprint in key Indian hydrocarbon basins including Rajasthan, Assam, and Arunachal Pradesh.

Market Share & Ranking

Positioned as a key integrated service provider in India's oil and gas sector; specific market share percentage not disclosed.

Strategic Alliances

The company operates through subsidiaries and group companies, including the recently integrated Dolphin Offshore business.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward production enhancement and integrated service models. India's oil and gas sector is witnessing renewed momentum due to government pushes for domestic production, benefiting integrated providers like Deep Industries.

Competitive Landscape

Operates in a competitive environment for rig services, contending with both domestic and international service providers for PSU tenders.

Competitive Moat

Moat is built on a large, specialized asset base and a long-standing track record with major PSUs like ONGC. This is sustainable due to high entry barriers (capital intensive) and the technical expertise required for gas compression and PEC.

Macro Economic Sensitivity

Highly sensitive to domestic oil and gas exploration policies and the government's push for energy security, which drives PSU spending.

Consumer Behavior

Demand is driven by industrial energy needs and government policy rather than individual consumer behavior.

Geopolitical Risks

Susceptible to global crude oil price fluctuations which dictate the demand and day rates for exploration and production services.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 and technical standards set by the Directorate General of Hydrocarbons (DGH) and client-specific safety protocols (e.g., ONGC standards).

Environmental Compliance

The company must adhere to stringent safety and environmental norms inherent in oil and gas exploration; specific ESG costs are not disclosed.

Taxation Policy Impact

Current tax liabilities (net) increased significantly to INR 16.59 Cr in March 2025 from INR 3.41 Cr in March 2024.

Legal Contingencies

The 2025 Audit Report issued a clean opinion on standalone financial statements and internal controls; no specific high-value pending litigation amounts were disclosed in the provided text.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the re-awarding of maturing contracts, which is inherent in the oil and gas service industry and could impact revenue by 20-30% if major contracts are lost.