Oil inventory in focus after receiving ₹90 Cr order from ONCG

On Monday, the shares of a pioneer in oil and fuel assist companies specializing within the constitution hiring of workover rigs and lots of extra in focus upon receiving a Letter of Award from ONGC value Rs. 90.7 Cr.

Value Motion

With a market capitalization of Rs 3600 Cr, the shares of Deep Industries Ltd closed at Rs. 562.50 down 4.69 % from its earlier day’s shut worth of Rs. 590.15.

Deep Industries Ltd. had an astounding bull run for 4 consecutive buying and selling days. Total, the inventory rose to about 14%, reaching a report excessive of ₹599 on 3^rd January 2025.

What Occurred

In a serious replace, this Oil Drilling service supplier has obtained a Letter of Award from Oil and Pure Fuel Company Ltd (ONGC) for the constitution hiring of a 100MT Workover Rig. 

This contract is ready to final for a interval of seven years for ONGC’s Assam Asset, with an estimated whole worth of Rs. 90.70 crores. This long-term cope with certainly one of India’s largest state-owned oil and fuel corporations positions Deep Industries for substantial development and monetary stability.

Though the information initially created pleasure, the inventory of Deep Industries skilled some volatility following the announcement, with a drop of 5% within the subsequent buying and selling session. This could possibly be attributed to profit-booking, as buyers who anticipated the information doubtless offered off their shares after a short surge.

In regards to the Firm

Deep Industries Ltd. is a one-stop options supplier for Oil & Fuel discipline operations & companies. The corporate has established a robust presence out there with its experience in discipline upkeep and well-servicing operations. Moreover, Deep Industries covers over 70 % of the publish exploration worth chain with area experience, expert manpower and international presence. 

This firm majorly caters to a long-standing loyal buyer base which incorporates ONGC, OIL, GAIL, ESSAR, GSPL and Reliance Infrastructure.

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Financials

Its income from operations grew by 29 % from Rs. 101 Cr to Rs. 131 Cr throughout Q2FY24-25, accompanied by income of Rs. 30 Crores to Rs. 42 Cr.

When it comes to monetary efficiency, the income development has been constant, pushed by long-term contracts with main shoppers. The corporate has ensured a wholesome stability sheet by sustaining a debt-to-equity ratio of 0.2. With an working margin of round 25-30% and a robust EBITDA margin, 

Current Orders

As of Q2FY25, the full order guide worth of the corporate stood at a worth of ₹2,622 cr. The corporate’s main order wins throughout this era embrace an order value ₹ 1,402 crore for 15 years length from ONGC for Manufacturing Enhancement. This contract boosted manufacturing from ONGC’s mature oil fields in Rajahmundry. 

The opposite contract was additionally from ONGC which was value ₹ 63 crore over a interval of three years for hiring of companies for a skid mounted modular sort fuel separation system and fuel compression items at Rokhia GCS Tripura Asset.

Conclusion

Whereas short-term volatility is frequent, the long-term outlook for Deep Industries stays optimistic because it continues to develop within the power business. For these trying to spend money on an organization with a stable footing within the oil and fuel sector, Deep Industries is actually one to observe intently.

Written by Shwetha Sairam

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