Deep Industries Limited (DEEPINDS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Deep Industries Q1 FY27 Earnings Conference Call. As a reminder, all participant clients will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rath from InCred Equities. Thank you, and over to you, sir.

Thank you, and good morning, everyone. Thanks for joining us today for Q&F 527 earning call of Leap Industries Limited. On behalf of the InCred Equities, I would like to thank the management for giving us the opportunity to host the call. Today, we have with us Mr. Parash Tawla, Chairman and Managing Director, and Mr. Rohan Shah, Director of Finance and CFO. Now, I would like to hand over the call to the management for the opening remarks, and then we can open the call for a Q&A. Thank you, and over to you, sir.

Good morning, everyone. It gives me immense pleasure. To speak to you all today, as we present our first quarter performance for the financial year 2027. We sincerely appreciate your continued interest and confidence in these industries. I trust you have had the opportunity to review our financial results, press release, and investor presentation, which have been made available on the company website and stock exchanges. I am joined today by our, with our Director, Finance and CFO, Mr. Rohan Shah, who will take you through the financial performance for the quarter ended 30th June, 2026, in detail after my remarks. So let me briefly take you through the India's macroeconomic environment and the evolving dynamics of the energy sector. The global energy landscape is undergoing a pivotal shift. While the acute, high-tension crisis management of early 2026, triggered by the shock disclosure of the Strait of Hormuz, has begun to settle into a structural rebalancing of supply chains, the underlying gravity of the situation remains. With the Strait still operating under restricted capacity, lingering geopolitical friction and operational bottlenecks continue to keep global markets on edge. Even as supply networks gradually adapt to the new reality. Driven primarily by Asian economy, global oil demand is projected to rebound sharply through FI 2027. However, the overarching theme across boardrooms is clear, energy security over short-term expediency. Achieved long-term security, natural gas is firmly taking place as the critical bridge fuel. Emerging markets across Asia, led aggressively by India and China, are accelerating LNG regassification infrastructure investments to insolute domestic manufacturing from white crude markets. I'll give an idea about the domestic landscape. So, here in India, the regulatory policy backdrop has shifted dramatically in favor of domestic exploration and production, i.e. ENP players. The government strategy has undergone a fundamental transformation, pivoting from a revenue-sharing mindset to an aggressive exploration-first agenda. This policy overhaul aims to reverse a decade-long decline in domestic crude oil production, which fell from 28.4 MMT in 2425 and dramatically slashed our national import dependency. Building discovery is only half the battle. Bringing molecules to market efficiently is what yield cash flows. Through the implementation of the unified pipeline tariff, a manufacturing unit in a remote district space, the exact same gas transportation tariff as one located next to an import terminal. This creates a truly democratic, steady national market for Every standard cubic meter of gas we produce. Guided by the vision of Honorable Prime Minister Sri Narendra Modi for an Atmanirbhar Bharat, India is actively positioning itself to attract capital into its ENP sector, part of the broader USD 500 billion energy infrastructure opportunity by 2030. The Ministry of Petroleum and Natural Gas is drawing up 80,000 crore incentive package under the National Deepwater Exploration Mission termed as Samudra Manthan. The mission aims to de-risk. High-stakes offshore oil and gas exploration and attract global energy majors to India's deep water basins. Government to bear up 50% of the cost of drilling exploratory wells. India imports over 85% of its crude oil requirements. Boosting domestic offshore production is key to insulating the economy from global energy volatility and supply chain disruptions. As a leader, covering over 70% of the post-exploration services value chain, spanning gas compression, gas dehydration, gas processing facilities, workover rigs, drilling rig services, integrated project management, and production enhancement contract, and offshore support, these macro shifts and policy overalls act as direct structural tailwinds for our core business. Let's just take you through our business verticals. Basically, we are active into four business verticals. The first one is gas processing. Charter hire of entire natural gas processing. A gas processing facility is a specialized industrial plant designed to receive raw natural gas from wells and process it into marketable products suitable for distribution and use. This is a value-added services by DEEP and an unique proposition. By DEEP, wherein we have converted EPC projects into charter-hire model. DEEP Industries Ltd. has started providing design, supply, installation, commissioning, and regular operation and maintenance of production systems to receive, process, and deliver hydrocarbons at custody transfer point, which are produced from the wells. The development of facility signifies The continuous efforts of the company to offer various value-added services to the client as a key player in oil and gas industry. It started with one such plan of gain site in Jaya and then has been adding few more of such facilities with ONGC. With gas compression, this is the first services that the company has started with in 1996. Natural gas compression refers to the process of increasing the pressure of natural gas. To make it usable for different end uses. Various types of compressors are used in natural gas compression, including reciprocating compressors, centrifugal compressors, and screw compressors. These compressors are designed to handle different volumes and pressures of natural gas based on specific operational requirements. Out of approximately 30% of the business being outsourced, Currently, almost 85% of that outsourced gas compression is been executed by Deep Industries Limited throughout the country. We own more than 80 gas compressor units, which is highest fleet in India. Gas dehydration is a process which ensures to remove water moisture and heavy hydrocarbons out of natural gas before putting the same in pipeline, so as to ensure safety of national grid. Natural gas re-hydration services are crucial in natural gas processing plants, pipeline, and facilities, where dry gas is essential for transportation, storage, and used in industrial and residential applications. Deep Industries Ltd. is one of the first companies in India who qualifies to provide gas re-hydration services. The second vertical is an integrated project management. We have adopted the integrated project management services as our team's turnkey solutions to drill and complete wells under single contracts. We have capabilities to provide pool of niche services involving highly technical jobs and services under one roof, improves coordination, time and cost management. Deep is the first Indian company to offer integrated solutions. The company has adopted various services of oil and gas exploration since 2016. Considering the opportunity in the space and unconventional energy being the future, Deep is one of the only Indian incorporated company who has the unique combination of providing services to upstream and midstream. Deep's experience, expertise, and quality equipment helps to deliver results to the challenging projects and meet stringent client demands. Our integrated project management services include surface hell drilling, air drilling, cementing, geophysical logging, wire line service, hydro fracturing, and coil drilling units. Deep commands a healthy market position in the area of providing the drilling and workover services on charter hire basis in India. Deep is having vision to expand rig business in overseas market too. Deep is also a crude drilling contractor in Kuwait Oil Company for providing the rigs. We own total 20 numbers of onshore drilling rigs and workover rigs, of which 14 are workover rigs. The capacity ranging from 30 to 150 tons, and six drilling rigs with capacity of 1,000 horsepower. The company has remarkably carried out and successfully completed various contracts for different operators and in diverse areas spreading from deserts of India, eco-sensitive areas, and difficult terrain of mountain range areas. Our fleet utilization is 100% in the segment as on date. Considering huge demand on onshore drilling rigs under integrated project management, the company is exploring opportunities of entering into higher capacity drilling rigs which can add further to the growth of business. The third vertical is production enhancement services. Deep Industries has secured 1,402 crore contracts from ONGC for 15 years. The SAG contract offers comprehensive services to boost production from one of the mature fields of ONGC. Under the production enhancement contract, DPS finance the hydrocarbon production and extend the overall lifespan of the field by deploying advanced techniques. ...practices and specialized field equipment. We had taken over the field in April 2025 and started with the baseline production. But due to an unfortunate incident at one of our wells at Mori 5, the incremental production was delayed by 5 to 6 months. However, we expect to deploy our rig soon and restart with all the facilities. We also plan to drill new wells to support the incremental production. We expect to start contributing through incremental production by October 2026. We also plan to do a capex of closely 150 crore by March 2027. The fourth vertical, offshore services. Deep Industries has been engaged into onshore services segment for more than three decades and with an intention to expand its services portfolio in the offshore segment. Deep acquired Dolphin Offshore Enterprise through NCILT in 2022 and gained control in January 2023. It is a step-down subsidiary of the company. We are currently reviving the business of the company step-by-step and have put its DP2 barge, that is Prabha barge, into operations. We wish to explore both the national and international markets, keeping the current scenario in mind. We are pursuing a disciplined contract-backed Fleet expansion strategy. To ensure optimal capital allocation and minimal exposure, capital expenditure is strictly committed only upon securing firm deployment contracts. We are actively evaluating both national and international tenders to drive sustainable risk-managed growth. The mission aims to de-risk high-stakes offshore oil and gas exploration and attract global energy measures to India's deep water basins. This is also an excellent opportunity for us to deploy our various offshore support services in national waters. Now, I'll speak on green energy and new initiatives. In F526, we entered into an MOU for venturing into green hydrogen business to explore the new business areas to add into our services portfolio. This MOU aims to bid for and execute various green hydrogen project tenders and contracts. We are actively evaluating opportunities in the said field. Deep is actively exploring new opportunities within geothermal energy resources. Geothermal energy is heat derived from beneath the earth's surface. In this venture, our extensive industry experience in onshore drilling will provide a strategic advantage, enabling efficient resource extraction and project development because geothermal projects heavily on the same subsurface extraction techniques used in oil and gas well drilling, many of our core competencies transfer directly. The mechanics of operating heavy onshore drilling rigs, managing drill strings, selecting drill bits, and handling circulation systems are nearly identical, though geothermal environments require handling higher temperatures and abrasive volcanic rock. Beyond geothermal, we are also evaluating various types of hydrogen energy production. Our established expertise in grass processing will play a crucial role in scaling and optimizing these emerging hydrogen initiatives. Our background in gas processing provides a powerful technical foundation for entering into the hydrogen sector. Because hydrogen production, purification, and handling rely heavily on unit operations already standard in oil and gas industry, many of our core competencies translate directly. We are continuously exploring new opportunities to venture into innovative segments and expand our industry footprint. Business momentum. Across our core service offerings, onshore drilling, work-over services, gas processing and production enhancement, asset utilization remain healthy during the quarter. Continued policy thrust on expanding exploration acreage, strengthening gas infrastructure, and enhancing domestic production capabilities is supporting sustained demand for integrated oil field services. Our strategic priorities for the remainder of FY27 are clearly defined. We aim to maximize asset utilization and safety across our drilling and workover fleet, expanding our footprint in UR and unconventional segments through new pieces, scaled-up charter-high deployment of gas processing plant modules and accommodation units to broaden a creative mandate to broaden our service capabilities. Thank you. Following his remarks, we will be happy to address any questions you may have. Thank you.

Thank you, Bharadwai. Investor friends, thank you for joining the call today. Fair evaluation. For quarter one, FY20. Forty percent. 10% YOY growth in EBITDA to Rs.131.8 crores in FY21, in Q1 FY27. 43.6%. We have been maintaining EBITDA margin in the range of 43 to 45%, providing us a decent cash flow to strategize our future growth project. At Rs. 89.14 crore. As on June 30th, our order stood at Rs 3,047 crores. Entering the remainder of FY27, deep industry is backed by strong operational resilience and financial discipline. Our recent momentum, anchored by strategic capital, Equips us to effectively navigate market shifts and seize growth opportunities. Moving forward, we prioritize generating healthy cash flows, maximizing return on deployed capital, and supporting our expansion with performance-driven approach. With sharp strategic clarity and solid core fundamentals, we remain fully committed to maximizing long-term stakeholder value.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their restaurant telephone. If we wish to remove ourselves from the question queue, you may press star and 2. Participants are requested to use hands-up while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Parth, Soda, from Trinitra Asset Managers. Please proceed.

Am I audible? Hello.

Yes.

Good morning, Parth, sir, and Rohan, sir, and congratulations on our good set of numbers. And also, thank you for incorporating the detailed order book bridge in the presentation. It definitely improves the transparency for investors. So, my first question is on offshore business. Like, how do you see the offshore business evolving over, like, the next two to three years? Is the focus on adding assets or improving utilization of the existing assets?

As I mentioned in the call today, there is an immense opportunity in the offshore segment. Thank you. More assets to the fleet. We are completely deployed. The current assets is.

Okay, got it. And how do you see it evolving over the next two to three years? What are the targets especially for the offshore business?

We are very bullish on the fact that the entire offshore segment would have an excellent opportunity for growth. Another would definitely be impacting.

Thank you so much for the opportunity.

Thank you. The next question is from the line of Bala Subramanian from Arihant Capital. Please proceed.

Good morning, sir. Thank you so much for the opportunity. And congratulations for our good set of numbers. And, sir, you have listed your top priorities like PEC, high high speed drilling rigs, and offshore fleet expansions. And how do your explorations of new adjacencies like green hydrogen, coal acidations, geothermal, fit into this priority list? And whether we have entire capability internally or through partnerships? And then we can expect all these adjacencies to contribute materially on the top-line side.

As mentioned, We are into the segment of gas compression. We are into the business of drilling. Both these activities in one way or another complement the segments that we are now trying to look at. So be it a hydrogen.

Okay, sir. Sir, on that gas processing capacity said, what is our capacity and what is our current utilization, sir?

So, in entire gas processing, currently we are operating from three different fields, two of ONGC and one of Cain, and with regards to capacity, we can definitely increase it as in when the opportunity comes.

Okay, sir. And, sir, this Dolphin acquisitions, I think we are reviving, and Cantla merger synergies are also there. So, could you please explain in these both areas, like when we can expect complete synergies from this merger and acquisitions?

Dolphin has already started contributing in our top lines as well as bottom lines with an increase in fleet. Thank you very much. We are working on it, on reviving their manufacturing facility.

Okay, got it, sir. Thank you.

Thank you. The next question is from the line of Sudhir Beda from Beda Family Office. Please proceed.

Yeah, congratulations to entire management team of Deep Industry for outstanding numbers. Hearty congratulations. Thank you. Sir, your company is growing at, say, last five years. The top line is growing at more than 35% and bottom line is growing at more than 40% since last five years. So, can I see the right to assume that the same growth rate will continue for next couple of years?

So, looking to the development and the need of the country for the oil and gas, we won't be surprised that this momentum should continue. And we are quite bullish on this.

Great, great. So, that means, even if we look at the FY28, is it fair to assume the company can deliver a profit of, say, 450 to 500 crores going by the same run rate what company has delivered in the past?

We believe it should.

With the moment that is currently going on, it won't surprise us if we can do that much.

Great. And, sir, can you throw some light on production sharing enhancement contract? From second half, I think it should contribute to the top line and bottom line, right? So, what is the outlook in FY28 for this particular segment?

So, yes, in current financial year, production enhancement with incremental production would start contributing from second half of this current financial year. And for FY28, we are quite bullish on getting almost more than 150 crores of revenue from this particular

That is very nice to hear that. And are we looking at the further contract like this? As ONGC is also coming out with a lot of blocks for this. And the government is also planning to invest billions of dollars into oil and gas sector. So your take on that?

Yes, definitely. So, production enhancement contract, we would definitely add a few more along with the existing ones. So, as you rightly said, ONGC has came up with similar requirements recently. So, we are evaluating that and we would definitely would like to bid those contracts as well.

Great. Thank you very much and all the best. And again, congratulations for believing the consistent number since last many years. Thank you very much. Thank you.

Thank you. The next question is from the line of Manan Shah from Money B Investment. Please proceed.

Yeah, hi. Thank you for the opportunity. Sir, in previous calls, we highlighted three strategic priorities for this year. The first one was on the PC, and we had also mentioned that there was one tender floated in the previous call, which we were evaluating. So, have we decided anything on that particular tender? Apart from that, also, we were in the process of identifying a DSP or a PSP for our offshore opportunities. So, have we been able to identify any asset or any opportunity on that side? And thirdly, if you can throw some light on the market size or market opportunity in terms of 1000 HP drilling rigs versus the 2000 HP drilling rigs, and where are we in the process of bidding for any tender for the 2000 HP?

Right. So, with regard to PEC, the tender has been protected probably months ago only. So, yes, we are actively evaluating that, and we wish to bid for this depending on the results which we get on our evaluation of that particular field. So, that is one. With regards to offshore opportunities, We are evaluating various standards internationally as well as nationally. So, as a policy, we always go for CAPEX only after getting the firm order. And this policy, we will continue here as well. So, based on the award of any particular contract, we will go for CAPEX or for adding a new vessel in the fleet. Thank you. With regards to higher-capacity drilling rigs. We are largely in demand because in India, we believe that majority of production can be achieved within 3,000 meter well depth. But having said so, the demand of 2,000 horsepower and 3,000 horsepower are also good and coming up in great way in near future. So, we are in process of evaluating and bidding.

Okay, so what would be the current bid pipeline and does it include any bids for any of these three priorities?

So as of now, the existing bidding pipeline is not having any of these three, which I believe would be coming up in bidding stage in coming few months. Okay, and the bidding pipeline would be continuously overing around 700 to 800 crore.

Okay, understood. I would like to welcome Mr. Rajiv Sinha to the DEEP team as well. If you can just highlight what sort of experience he brings and what sort of role is he going to play in our company?

We have been appointed as the head of operations, and he has got an immense experience in the oil and gas sector over two decades, and he was quite active while he was working with Vedanta, and he has good amount of experience on the onshore operations.

And we are looking forward to... So, you would be playing a key role in the PEC contract that we have, or it is in the entire existing operations that we are running?

It would be under the entire operations of the compressors and the rigs, and also PEC to a certain extent.

Understood. Lastly, in terms of our numbers, it seems there have been some other subsidiaries which have contributed to our overall performance for this quarter. So, if you can help me understand which subsidiary was it and what was this contribution from, because apart from the Dolphin, there seems to be some decent contribution from some other of our subsidiaries.

Right, so... Apart from Dolphin contributing around 43 crore in this quarter, we have good amount of contribution from other subsidiaries including our Dubai subsidiaries. So I think around more than 50 crore revenue has came from Dubai, two Dubai subsidiaries as well as the Indian subsidiaries.

Okay, and this sort of performance is expected to continue for those subsidiaries, and what sort of contracts or services are these subsidiaries providing in those geographies?

So, the Dubai subsidiaries are primarily into scheme gas processing services, as well as they are having some opportunities in equipment sales as well. Two subsidiaries are focusing on two different areas, and we believe this kind of opportunities will continue throughout the year. Okay, thanks. I'll get back in the queue. Thank you.

Thank you. The next question is from the line of Bhavya Gandhi from Bajaj Alternate Investment. Please proceed.

Yeah, hi. Thank you, Parish Bhai and Rohan Bhai. Congratulations on a very good set of numbers. A couple of questions from my end. Sir, if you want to dissect the incremental revenue from Dolphin, Candle, and PEC for 27 and 28, that will be great. How much we have already booked and how much is yet to come in?

So, with regards to Dolphin, we are working on a contract of three years, which is for the barge, which is our DP2 Barge Prabha. So, that single contract, we believe, would continue to contribute more than 150 crore a year. With an addition into fleet, we are expecting some good amount of growth in Dolphin in FY28. With regards to Kandla, as I said before, we have taken that company for backward integration to improve on our operating margins. So probably on revenue side, we are not expecting.

Okay. And, sir, in case of BEC contract, suppose hypothetically, if gas prices fall below $8 mm BTU, still we will receive $8 per mm BTU irrespective of the spot rate?

No. So, this block is under free price mechanism. So, it would govern with spot price and the market-driven prices. So, we don't foresee any possibility of falling gas price below that.

Okay. And what would be the current rate for dollar per MMBT if you can just quantify that?

It's ranging from 8 to even 14, 15 as well in spot market.

Okay, correct. Sir, if you want to quantify the total number of onshore walkover and drilling rigs in the country, and how much would be the outsourced rig market, total number of rigs in the country, that would be really helpful.

Sir, while I am saying this, this is purely a justification. Now, there should be a fleet of close to 125 rigs which are outsourced and close to that much amount of rigs which would be

captive by the producers.

So in all this, we have to say the total market would be close to around 215 to 220 kinds of work-over and drilling rigs onshore.

Okay, and this shift we are seeing that the outsourced market is increasing gradually on the rig side as well?

Yes, yes, absolutely.

Okay, okay.

And sir, how often is this Ricktender opening process? I mean, it opens every six months, yearly, how is it usually?

Basically, you can't time that out, but based on the requirement and the services that they require, they may come one after another, maybe that frequency could be even a few days and that can even be a few months. So, that is not in order to what a three-month or six-month timing.

Got it. And just one last thing on the green hydrogen business, sir, is the contract tendering started, and if you can provide some unit economics or revenue metrics on that front, and when can we expect some revenues fructifying in terms of numbers for us?

For now, we are evaluating the possibilities to get into the sector. We have already built one of the tender wherein we have undertaken the job to do a balance of plant, that is the EPC jobs, and the electrolyzer was something that was provided by another joint venture partner. We don't have the outcome of that tender yet, but we are still closely monitoring any such opportunities that keep coming in this sector.

Okay, wonderful, sir. Congratulations once again, and that is from Mayan. Thank you so much.

Thank you. The next question is on the line of Raman KV from Sequent Investments. Please proceed.

Hello, sir. Can you hear me?

Yes.

So, I just have a few questions. One is with respect to write-off, which we did in the previous year as well as a year before with respect to Kandla. Can we expect any further write-off during the year or are we completely done with it?

With regards to Kandla, we are completely done with the legacy issues.

Understood, sir. And, sir, I just want to understand with respect to the production enhancement contract, the vertical, what's the business opportunity as in, like, how much of the government's mature will is under, you expect that will go through a production enhancement requirement?

So, we don't have exact numbers of what kind of strategies would government be doing, but as I understand, government is actively looking into enhance oil and gas production through various mediums, and PEC being one of them, it assumingly seems to be one of the best opportunities. There were two PECs that happened before a year or so, and now we have a few more PECs that have already arrived. So, going forward, we foresee a good amount of such drives coming in from the government.

And, sir, with respect to offshore business, you said currently two assets have been deployed and you are looking to add more assets. Is there any particular bid pipeline for you wherein you are bidding for offshore business? And if so, can you give a ballpark number for it?

So, for now, we don't have any bidding pipeline, but there are few tenders which are upcoming, and we are eyeing on those tenders. So, the moment we bid it, then we will be able to, you know, tell what kind of a pipeline could that be.

So, the nature of the tender, because it's an offshore drilling business, it will be a long term. So, will it be on a fixed price basis or will it be on varying, will it be on the market price?

So, we would be bidding for support services, not for offshore drilling. So, it would be kind of charter hiring of barges, thugs, and a few vessels. So, it would be fixed-price kind of contracts. Understood, sir. Thank you.

Thank you.

Thank you. The next question is from the line of Manan from Walford P&S. Please proceed.

Thank you so much for the opportunity. And congratulations to the team on the great set of numbers. So, two, three questions I had. One is on the Tamla energy. I know that you said that we have taken that up due to for our margin expansion. So, can you quantify how much margin expansion can that have? That is one. And second, how much KPEX will we have to do? So that the kandla energy becomes beneficial for us, and any sort of debt we have to take for that.

Yeah, one of the critical chemicals I would say which we use in our drilling and integrated project management can be manufactured in kandla's manufacturing facility. Margin by one and a half percent. With regards to Capex, we are not forcing much Capex for reviving these facilities because We need certain amount of repair and modification. Thank you.

Okay, perfect. So, the 1.5% increase, you said, was it in the EBITDA margin?

Would improve our EBITDA margin going forward, yes.

Okay, perfect. So, first, done. So, second would be on our PAT, which was almost 90 crores this quarter. So, just assuming some things, you can correct me if I'm wrong, sir. Annualizing our PAT leads us to almost 360 crores for this year. Last quarter, we guided for almost 400 crores in FY28. So, do you think we should increase our guidance for FY28 or we might do, like, what are your thoughts on this stuff?

No, on FY28, we are gunning for a pet of almost 500 crores. By 28, because Somewhere above 350 kcal.

Okay, perfect, sir. Thank you so much. And, sir, last would be, in our coal gasification part, where would we be placed in the value chain? Please, can you help in that?

No, no. So, in coal gasification, we are not there.

Oh, okay. Because last quarter, we said we are looking into it. Okay, no problem. And then, just the last question would be, sir, you said we have two offshore assets. Sir, one of them is BP tool, the Prabha barge, and which is the other one, sir? And how much more are we planning to add?

So, other one is EHTSV, which is anchor handling tug. Thank you.

Okay, I'm sure. That's it from my side, sir. Thank you so much.

Thank you.

Thank you. The next question is from the line of Pankaj from Agus Capital. Please proceed.

Hello, Parasri Rohanji. Let me add my congratulations to great set of results to yourself and the entire management team. Thank you for giving me the opportunity to ask the questions. I have three quick questions. One is in the working capital slash cash side. Historically, we have been able to convert our EBITDA to cash to the tune of 75 to 80 odd percent. Is quarter one on the similar lines or is it different? Yeah, it is on similar lines.

Okay, fantastic.

I think in the presentation you mentioned that you are planning to enter into high-capacity drilling rigs. Is there a capex which is expected in 27 because of that? If yes, then are you planning to take that or, I mean, what is the plan we have for funding that piece?

Yes, because in this higher capacity drilling rig, as of now, we do not have the asset. So, if it would be... Good morning, everyone. But that would be funded by debt as well as internal approval.

Okay, but do you have some plan of what kind of CAPEX you are looking forward to in FY27 for that reason?

See, in our business, CAPEX is always backed by firm order. We cannot just estimate that how much KPEX will be doing unless we win the contracts. But yes, based on our broad estimates, we may do KPEX of around 250 to 300 crore in FY27.

Okay, great. Thank you. Thank you for this. My next question is about the margin profile. I think we have seen a good 200, 250-odd basis points improvement in our EBITDA percentages in Q1 as compared to the guidance we saw or historical trends we have seen. And also, we understood basically what you said and explained in the early part of your session that our focus was also moving towards offshore in addition to the onshore stuff we are doing. So how do you see the blended EBITDA margins going forward, say in FI27 or FI28?

So, we believe that blended EBITDA should improve in FY28 and probably in the latest year as well, because by getting incremental contribution from offshore as well as production enhancement contracts will help us improving blended EBITDA.

And is it fair to assume that the EBITDA margins on offshore stuff would be better than onshore?

Yes.

Okay, that's fantastic. Last question, sir. From my side, we have some 3,000 odd crore open order book we have. So, how much of that we plan to execute in FY27 and 20 years, sir?

So, of this order book, probably more than 60% value is something which is being executed over next two, two and a half years. And one major chunk is of production enhancement contract, which is a long tenure contract.

Great, and would you have some number for FY27 out of this, 3,000 or so?

So, I think you can consider almost 800 crore kind of contracts would be executed over FY27.

So, you can sign to this one also to you, and all the best for your next endeavours. Thank you.

Thank you. The next question is from the line of Hemant, Sony, an individual investor. Please proceed.

Sir, thank you for providing me the opportunity. Actually, I am new to the company. So, pardon me if I have asked something. I will do it. Because I just wanted to know how does the pricing and all work? Is it a revenue sharing model or something or there is a fixed price contract?

So, largely our services business runs on fixed price contract. So, these are all tender-driven contracts with L1 bidding.

Okay. Okay. Thanks a lot.

Thank you. The next question is on the line of Saurav Mondal, an individual investor. Please proceed.

Hello, sir. Thank you for the opportunity. So, what is your target share of revenue coming from non-PSU and PSU in FI 27?

See, our larger client base is, of course, PSU. So, PSU will continue to contribute a higher amount in overall revenue.

Okay, Shashlar. So, are you involved in exploration service or totally post-exploration?

So, we are largely into post-exploration only.

Okay, okay. Like no 0% exploration.

Yeah, but for us, it's a service. It can be pre-exploration, but we will be charging our fixed prices. So, we do not carry any success risk.

Okay, okay. Thank you, sir.

Thank you.

Thank you. The next question is from the line of Sri Kar Sai, an individual investor. Please proceed.

Yeah. Thank you, sir, for the opportunity. Sir, it's regarding the CEC tender. This Mori sale, how much was it about to contribute? I mean, in incremental of 1,80,000 SQMDA, how much was it about to contribute?

Sorry, your voice is a little low. If you can just repeat the question.

Yeah, sir, am I audible now?

Yes.

Sir, I mean, we have auctioned data from September of 2025, where out of 1,80,000 S&MD, Mori was solely expected to contribute only 2,000 S&MD, which was the smallest effect. So, were we expecting only that much or is it more than that much?

No, so, Mori was beyond our surprise, and we had encountered huge amount of guests with high pressure. But with the recent incident, as of now, Mori 5, we are not operating, but we may explore other wells.

It's regarding other two production enhancement contracts which have come out. So, in our present contract, we get around 1 crore per month to maintain the baseline in the PEP. But for Gammage, it's around 8 crore or 9 crore per month. And for Gelicki, it's around 28 or something like that. So, annually, it's coming up to around 100 crores per year for Gansfield and around 300 to 350 crores per year for Galiki field. So, the contract value, I mean, generally, out of 1400 for us, 150 or 180 crores was coming up to minimum fixed field. But here, for these two contracts, the million of 60 people took around 1,500 crores and around 4,000, 5,000 crores. Are these calculations correct?

Currently, we are evaluating these tenders. So it wouldn't be fair for us to comment about what our strategies would be and what kind of revenue visibility would it be because we have not yet been awarded. But once we have these awards, we would be able to give a better guideline on how we are looking at these bills.

Sure, sir. I mean, we suggest the minimum fixed fee which ONVC was offering according to the NIS. Anyway, sir, the next question is regarding the continuity of our other accessories, like, you know, the dolphin shipping or raft equipment. Were they contributing anything for our Q1 performance because we saw that 30 to 40 grows additionally from us? I'm thinking I'm just absolutely...

Contributing. But they would continue to contribute over a period of time.

Okay. And also, one last question, sir. It's regarding the kind of enquiries being quoted right now, like... Vedanta itself has put it for northeast exploration drive, and then recently for Rajasthan, they are asking for drilling rigs of 1,000 to 2,000 horsepower, and then again workover services, and again we have ONGC for 1,000 horsepower, and again we have oil India with workover rigs. So, is it a normal inquiry pipeline, or is it really due to the Iran crisis, we are actually seeing more inquiries coming into that?

Basically, it is a mixture of both. So, there were inquiries, and now because of this situation, these things have ramped up. So, we won't be able to identify that why this inquiry has come up, for what reasons, but we believe that these both reasons are equally valid for this inquiry.

And also, congratulations on a very, very, very great set of numbers, sir, and all the industry. No, sir. I will be congratulating on such a good number. Thank you.

Thank you.

Thank you. The next question is from the line of Yash from Avera ANC. Please proceed.

Hi, sir. Congratulations on my excellent results. Sir, I have a couple of questions. First, one is regarding the production enhancement. So, post the mishap, I think we have started the production is what I understand. So, have we already reached the baseline production? That is one, since you said that incremental production will come from H2F527. And with regard to the production enhancement, so in the same contract, When are we expecting, you know, to start with newer wells under the same contract?

Yes, so in existing production enhancement operation, we are little above this baseline production. And so it is except that particular well we are producing from all other wells which we are producing. And with regards to... Contributing from September end or October onwards. With regards to new wells, again, we have planned to drill a few wells in this current financial year. Probably in Q4.

Sir, with regard to the related party transaction, the loan to the group entity, is there any progress on that? I mean, we were to evaluate that transaction, right?

Yes, so from the loan given to Prava Energy, we have received back almost 86 crores. Probably by end of second quarter, we are expecting to clear the entire loan, repaid.

Superb, sir. And so just last one. So out of the four verticals that we spoke about, so could you throw some light on the ROCs across all the four verticals and how do we see, you know, growing each of the verticals with regards to returns that we generate from?

We do not have ROCE data for individual verticals, but as a whole, we believe that going forward, ROCE would tend to improve because with contribution coming in from offshore and production enhancement with higher margins, Thank you.

Thank you. A request to all participants, please restrict your questions to two questions per participant. For more questions, please rejoin the queue. The next question is from the line of Sanjay Shah, an individual investor. Please proceed.

Hi, thank you very much. Can you hear me? Yes, sir. And, again, congratulations for the great set of numbers and the overall transparency. Just if it is possible, Ron, we spoke about the production announcement accelerating from the second half of the year. So if we just go to fiscal 28 and think about production announcement and only this field, how much do we think when we talk about the 500 crores profit number would we expect the production announcement contract to contribute? That's one. And second, with all the plans that we have, do we envisage raising capital in the near term, or do we think that we are self-sufficient in terms of funding of all our investment plans?

Yeah, yeah. So, with regards to production enhancement, we are expecting revenue of almost 150 plus crore kind in FY28 with this single field which we have. And I think these numbers can go up as well depending on the performance we do in current financial year. With regards to fund raise, as of now, we do not have a major KPEX plan. And since we are having debt-free on net debt basis, probably our balance sheet support us for taking some debt as well in case of new KPEX. So as of now, we are not forcing any equity raise.

Perfect. Just on the production announcement, what kind of volumes does that suggest when you say 150 revenues in fiscal 28?

Sorry, the volume of gas you are seeing.

What kind of volumes does the production enhancement contract suggest when you talk about revenues of 150 crore rupees in fiscal 28?

It would be around 2.5 to 3.5 cubic meter a day.

Sorry, can you repeat that?

2.5 to 3 lakh cubic meters per day.

Second, but what's the baseline? Sorry, if you can just repeat the baseline that you have to deliver beyond which you start getting the share of the profits?

Baseline is around 1.44 kind of.

Super. Thank you and all the best.

Thank you.

Thank you. The next question is from the line of Pankaj Motwani from Equirius. Please proceed.

Thank you for the opportunity. So my question was on the standard learning part. So I was looking at your standard learning revenues. So it has been delayed at around 175 crore for the last five quarters. So just want to understand what is concerning growth in the segment. And if I see your total order book, so if I exclude the PVC order and document order from a total order book, so a total order book from a traditional onshore business is around 1450 crores. And we have an execution timeline of around 2.5 years. So that implies our revenue of around 600 crores from the traditional onshore business. And we have a current run rate of around 700 crores from the standalone part. So just for this one to understand, like what is the growth outlook for the standalone business? And how do we achieve the guided 30 to 35% in this segment?

Right. So, on standalone basis, this 170 crore kind of quarter would improve from Q2 onwards because by adding new contracts... So, we are currently working on different 4 to 5 guests compression and processing contracts where they were supposed to start contributing from late Q1 and Q2. So, those contracts will give contribution going forward. So, on standalone basis, we are expecting growth of somewhere. 18-20% in this current financial year, with consolidated growth of more than 25%.

Okay, got it. So, our current order book will be able to suffice with the 18-20% growth in this standard one because, as I mentioned, if I exclude the Adolphin orders and PEC orders, then our order from the traditional onshore businesses are 1-4-5-0 crore.

So, with the existing order book and the tenders which we are expecting to convert, there are few tenders. Where we are expecting the outcome and So we have considered that part as well. So I think we will be able to achieve that growth.

Okay, I got it. And one more question, like you mentioned that you have one more fleet, which is the anchor handling tug. So I just want to understand that the anchor handling tug has started contributing to our bottom line because it is in the JV. So, whether people started contributive?

Yeah, it has started contributing, but it is not under any long-term contract as of now.

Okay, got it. Yeah, that's my question. Thank you.

Thank you.

Thank you. The next question is from the line of Firak Satya from Satya Industries Limited. Please proceed. Please proceed.

Hello. Am I audible?

Yes. Yeah.

First, congratulations on the great set of numbers.

Thank you.

Yes, please proceed, Mr. Chidak.

Hello, can you hear me?

Yes, yes.

Yeah, so you mentioned that currently outstanding order book is 3047 crore, and out of this, this 800 will be executed in the next nine months. Is that correct?

Correct.

Okay, so I wanted to understand another aspect of this is how much intake of orders will be for this year?

So I think you must have observed that over a period of last four, five quarters, more or less we are adding similar amount of contracts as we are executing. It should continue and probably will add a few more larger contracts in the coming future.

Okay, fair enough. That's it. Thank you.

Thank you. Due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments. Over to you, sir.

Thank you, everyone, for joining this call. It was a pleasure interaction with you. If you have any further queries, you can directly connect us. We would be happy to answer all your queries. Thank you.

Thank you. On behalf of INCRED Equities, that concludes this conference. Thank you for joining us and you may now disconnect your line. Thank you.