# 1. Financial Performance ## A. Key Figures * Revenue: ₹221 Cr Q2 FY26 (+69.2%) · ₹420.5 Cr H1 FY26 (+65.5%) * EBITDA: ₹112.9 Cr Q2 FY26 (+74.7%) · ₹207.9 Cr H1 FY26 (+64.9%) * EBITDA Margin: 46.6% Q2 · 45.7% H1 (maintained in 45–46% range) * Net Profit: ₹71.2 Cr Q2 FY26 (+71.4%) · ₹132.9 Cr PAT H1 FY26 (+65.6%) ## B. Revenue Growth * **Strong Execution Drives Growth:** Revenue expansion in Q2 and H1 reflects improved asset utilization and successful commissioning of **new assets into operation**, enhancing fleet capacity. * **Project Momentum:** Growth trajectory supported by government-backed domestic energy initiatives, with revenue scaling as incremental assets become operational. ## C. EBITDA Margin * **Resilient Margins Amid Volume Shifts:** EBITDA margin held firm in the 45–46% range despite near-term pressure from higher production volumes, which are expected to **boost margins on scale** in coming periods. * **High-Margin Projects in Pipeline:** ONGC PEC project to contribute at **~50% EBITDA margin**, while Dolphin Offshore delivers **~80% margin**, signaling strong profitability leverage from new ventures. * **Business Mix Stability:** Margins across verticals remain consistent, with **gas business slightly outperforming** on profitability. ## D. Net Profit * **Sustained Profitability Confirmed:** Company maintains positive bottom line with **two consecutive quarters of net profit growth**, supported by operational improvements. * **JV Upside Ahead:** **JV profit share not yet in P&L** but expected to flow into future quarters on a yearly distribution basis, adding incremental earnings visibility. ## E. Cash Flow * **Other Income to Remain Stable:** Interest income, mutual fund returns, and **FOREX gains on overseas receivables** to sustain other income; however, **M2M and currency gains are non-recurring in nature**. --- # 2. Order Book & Backlog ## A. Key Figures * **Bidding Pipeline:** **₹700 Cr** (current value) * **PEC Contract Value:** **₹1,402 Cr** (15-year ONGC contract) * **Annual PEC Revenue (Est.):** **₹140–150 Cr** (from FY26) ## B. Total Order Book * **Robust Backlog Growth:** Order book reflects strong long-term revenue visibility, with **53% CAGR** expansion since FY, now standing at ₹3,050 Cr. * **Near-Term Execution Clarity:** Over **₹1,650 Cr** of the backlog is executable within five years, excluding the long-term PEC. * **Bidding Momentum:** A ₹700 Cr bidding pipeline offers meaningful growth optionality, with high conversion confidence based on historical win rates. ## C. PEC Contribution * **Core Revenue Anchor:** The 15-year ONGC PEC contract represents a major component of the order book, with front-loaded revenue recognition expected over the first decade. * **Expansion Potential:** ONGC is progressing internal processes for additional production enhancement contracts, with new tenders anticipated in coming quarters. * **Segment Balance:** Gas and other project segments maintain proportional representation within the current ₹1,700 Cr order book structure. --- # 3. Asset & Fleet Expansion ## A. Key Figures * **New Rigs Added:** **6** in last 8 months * Depreciation Run Rate: ₹4 Cr quarterly (may increase to ₹5–6 Cr if expanded) * **QIP Raised:** **₹300 Cr** * **Total CAPEX Plan:** **₹600 Cr** (₹100 Cr already allocated) ## B. New Rigs Added * **Fleet Expansion On Track:** Six new rigs added over the past 8 months are ramping up, with two additional rigs en route from China for deployment in December and Q4, supporting near-term revenue growth. * **H2 & FY27 Growth Pipeline:** Additional rigs expected in H2 FY26, with active tendering ongoing and potential for further additions in FY27. * **Strategic Asset Acquisition:** Company is exploring purchase of **7–8 auctioned anchor handling tugs** at potentially lower prices and is in advanced negotiations to acquire shortlisted vessels for Dolphin Offshore. ## C. Dolphin Offshore Growth * **Midstream Leadership & Expansion:** Company operates one of India’s largest gas compression fleets and is scaling modular gas processing systems via Lease-Operate-Maintain model, gaining traction with PSU clients in complex fields. * **Advanced Acquisition Stage:** Dolphin Offshore has shortlisted new vessels and is finalizing contracts, signaling imminent fleet expansion. ## D. CAPEX Allocation * **Funding Growth Strategically:** QIP proceeds of ₹300 Cr will accelerate **₹600 Cr CAPEX plan**, funding production enhancement, new asset acquisitions, and strategic opportunities. * **Capital Discipline:** ₹100 Cr of total CAPEX already committed, with remaining flexibility to deploy toward high-return expansion and M&A. --- # 4. Client & Revenue Mix ## A. Key Figures * **ONGC Revenue Contribution:** **~60%** of total revenue * **Historical ONGC Share:** **75–80%** (prior levels, now reduced) * **Standalone Business Growth:** **60–70% YoY** (recent two quarters) ## B. ONGC Dependency * **Reduced Concentration Risk:** Significant de-risking achieved through client diversification, with ONGC’s revenue share down from historically high **75–80%** to **~60%**. * **Pricing Leverage:** Current pricing aligned with ONGC’s benchmarks, but **bullish outlook** supports potential shift to spot market for better realizations if volumes and clients allow. ## C. Private & Overseas Clients * **Strategic Diversification:** Active onboarding of private and international clients continues to reduce reliance on PSUs, though ONGC will remain dominant due to structural industry dynamics. * **Value-Added Services Drive Margins:** Focus on integrated, one-stop solutions enhances client efficiency and supports **margin-assertive growth** across customer segments. ## D. Segment Revenue Share * **Accelerating Standalone Growth:** Standalone business momentum has strengthened markedly, with **recent growth doubling** prior trends, reflecting successful execution and demand uptake. --- # 5. Project Execution & Output ## A. Key Figures * Gas Price Realization: $7.5 per MMBTU (Qtr) * **Average Daily Production Volume:** **170,000 cubic meters** (Qtr) * Revenue Guidance: ₹40-45 Cr H2 FY26 · ₹60 Cr total FY26 · ₹140 Cr+ annually from next year ## B. PEC Production Volume * **Execution On Track:** Production enhancement contract at Rajahmundry has commenced operations in April, achieving stable output in line with expectations. * **Growth Trajectory:** Incremental output gains expected in coming quarters, supported by optimization efforts and recent addition of **several sizable projects**, including a new gas processing service. * **Expansion Pipeline:** Management expects further ONGC bidding rounds under PEC and intends to pursue additional project wins. * **Sick Well Opportunity:** Tenders for ONGC’s non-producing sick well revival program have been issued; company is assessing technical and commercial feasibility. ## C. Baseline Crossing * **Milestone Achieved:** Production has crossed the baseline threshold of **5 PPM per day**, validating project ramp-up and supporting full-year guidance confidence. --- # 6. Risks & Market Factors ## A. Vessel Supply Pressure * **Limited Market Impact Expected:** Despite auction of 17 laid-up Bourbon-class offshore vessels by Chinese ICBC, management sees **no material price pressure** on anchor handling or platform supply vessel rates due to global market scale and long-term contracted deployment. ## B. Receivables Recovery * **ONGC Arbitration Delayed:** ONGC arbitration remains unresolved with **no updates in 6 months**; timeline withheld due to ongoing court matter, though resolution is anticipated soon. * **Kandla Receivables Under Evaluation:** No recovery reported for Kandla receivables; follow-up actions initiated with **positive updates expected in coming quarters**. * **No Provision for Kandla Energy Exposure:** Company has **not taken any provision** for Kandla Energy receivables, citing ongoing assessment and expectation of partial recovery. * **Conservative Leverage Stance:** Maintains low-debt strategy to avoid sector-specific historical risks linked to **high leverage**. ## C. Competitive Intensity * **Resilient Contract Base:** Services business insulated from crude oil price swings due to **predominantly fixed-price, 3-year contracts** and India’s structural energy deficit supporting continuous production. * **Competition Rising but Defensible Position:** Sector expansion is attracting new entrants, but company’s **three-decade track record, technical expertise, and client solutions** underpin competitive resilience. * **Strong Government Energy Momentum:** Increasing tenders, inquiries, and orders reflect **robust state-driven push to boost domestic oil and gas output**. --- # 7. Guidance & Outlook ## A. Key Figures * **Revenue Growth (FY26):** **35%–38%** guided standalone (+35%+ potential) · **>35%, up to >40%** expected consolidated * **EBITDA Margin:** **43%–45%** current run-rate · expected to exceed **45%** (incl. other income) * **Standalone Margin (excl. other income):** Improved to **40%** expected from **37%** * **Dolphin Offshore Revenue (FY26):** **~₹100 Cr** expected · **>40% YoY growth** in subsequent years * **Deep Industries Revenue Growth:** **>35%**, with potential for **38%–39%** ## B. Growth Outlook & Drivers * **Sustained High Growth Trajectory:** Revenue momentum set to continue in H2, with full-year growth underpinned by **new assets**, **production enhancement contracts**, and **full-year contributions from recent additions**. * **Multi-Year Visibility:** Consolidated revenue growth of **30%–40%** expected over the next two years, supported by a strong order book and policy tailwinds. * **Fleet & Subsidiary Expansion:** Dolphin Offshore poised for **over 40% YoY growth** post-FY26 on new asset ramp-up, signaling scalable subsidiary performance. ## C. Margin Expansion Pathway * **Upward Margin Trend Confirmed:** EBITDA margins expected to breach **45%** in coming quarters, driven by operating leverage and asset utilization. * **Core Business Margin Improvement:** Standalone margins (excluding other income) on track to reach **40%**, reflecting improved operational efficiency. ## D. Strategic Enablers * **Balance Sheet as Growth Catalyst:** Strong financial position emphasized as key enabler to capture **anticipated sector-wide growth momentum** without reliance on external funding.