DEEPINDS - Deep Industries Limited Share Price

In the earnings call for Q4 and FY26 held on May 15, 2026, management expressed an optimistic outlook for Deep Industries, projecting a revenue growth of 25% to 30% for FY27 due to favorable market conditions and ongoing projects. The company's Chairman, Paras Savla, highlighted positive macroeconomic trends in the oil and gas sector, with global oil demand expected to increase by 1.6 million barrels per day, reaching between 106.2 million and 107.8 million barrels daily in 2027.

Key forward-looking points included:

1. The company's order book remains robust at over INR 3,000 crores, providing multi-year revenue visibility and confidence in growth.
2. Management anticipates an execution of over INR 800 crores from this order book in FY27, driven by its long-term contracts.
3. EBITDA margins are expected to stabilize around 44% to 45% year-on-year, with a projected EBITDA for FY27 aligning with this trajectory.
4. The company plans a capex of around INR 150 crores and potential investment in higher capacity rigs, aiming for returns exceeding 20%.
5. The acquisition of Kandla Energy was completed, aligning with the backward integration strategy to enhance operational efficiency.
6. The company is expanding into new areas like green hydrogen and coal gasification, reflecting its commitment to diversified energy solutions.

Overall, Deep Industries is poised for growth, leveraging government initiatives and a strategic focus on enhancing production capacity in both onshore and offshore operations.

Here are the major questions asked during the Q&A section of the earnings call along with detailed answers provided by the management:

1. Question: "Have all the receivables been written off, or are there still legacy debtors pending? If so, why has it not been written off?" Answer: "We have written off all old trade receivables of Kandla Energy after extensive recovery efforts. However, other legacy receivables from Dolphin remain in our books due to favorable arbitration awards. We're optimistic about recovering these, which is why they're still outstanding."

2. Question: "With the current order books, what do you project for growth in FY27 and FY28?" Answer: "We're optimistic about maintaining our growth trajectory, likely more than 25% to 30%. Given the ongoing focus on drilling, we expect to see continued demand expansion."

3. Question: "Are you qualifying for the government's new coal gasification scheme, and do you plan to venture into this?" Answer: "We are exploring various areas, including coal gasification and green hydrogen projects. We're actively looking into these technologies for potential future projects."

4. Question: "Given the recent delays in production enhancement, will targets for FY27 be adjusted?" Answer: "The production timeline has shifted by 1 to 2 quarters due to the incident. However, we still expect to meet our original projections, keeping our overall targets intact."

5. Question: "What caused the revenue spike at Dolphin this quarter?" Answer: "Dolphin's revenue spiked due to a higher contract rate during the quarter, which also resulted in a corresponding increase in expenditure. Although profitability margins may have tightened, the overall profit remains stable."

6. Question: "What is the expected revenue from your current bid pipeline of INR500-600 crores?" Answer: "This pipeline consists of bids already submitted, but we have additional PEC tenders on the horizon. We're optimistic about converting significant orders soon."

7. Question: "Will the new 2,000 HP drilling rigs be pursued through a joint venture?" Answer: "Yes, we plan to pursue this opportunity via a joint venture. We expect that demand for such rigs will increase, and we're working towards qualification."

8. Question: "How much of the INR3,000 crore order book will be executed in FY27?" Answer: "We expect over INR800 crores from the current order book to be executed this financial year, with more contracts anticipated to come in."

9. Question: "What strategic priorities does management have for the next three years?" Answer: "Our top priorities include expanding PEC, increasing higher capacity drilling rigs, and adding to our offshore fleet. This aligns with our growth expectations for the future."

10. Question: "What are the expected EBITDA margins despite significant growth predictions?" Answer: "We anticipate EBITDA margins to remain stable at around 44-45% year-on-year, subject to minor fluctuations."

These answers capture the key points provided by management while remaining within the character limit constraints.