Deep Industries (DIL)

Q3FY23:
• STRONG DEMAND: This is reflected in our strong order book, which currently stands at Rs 976cr up 76% YoY. With a thriving bidding pipeline, future demand looks promising and our debt-free, well-funded status positions us for success.” Company is witnessing high EOIs & bids submission which could further enhance the order book going forward.

• The Government also announced the availability of 26 exploration and development blocks totalling around 2.23 lakh sq km under the HELP Policy. Furthermore, 75 discovered oil and gas fields across multiple onshore and offshore basins were offered under DSF-3 bidding. These policies have interested many new players forming a base for the potential expansion of our clientele. gas production in India is slated to increase 18% CAGR till FY ’25.

• DOLPHIN OFFSHORE: With the acquisition of Dolphin, the group is set to expand its services portfolio to the offshore segment. Now we are in a position to give service to our clients both onshore and offshore from exploration to production and processing. With multiple growth factors in action, we anticipate substantial growth ahead. Our revenue outlook is positive, and we anticipate robust interest in our offerings. We have also started evaluating the present tenders, which are already there in market for offshore services, few of them which Dolphin can provide. Operations will take another six months, nine months to actually start up and running. In the past, Dolphin was operating on more than 35% EBITDA, and we are also sure that we can achieve those type of margins. Dolphin offshore entity will be listed.

• Our margin outlook is in range of 40%.

• See, in opex, fuel is one of them and manpower is one, and repair maintenance of store spare is one of them. So, these three heads are major costs for us, other than that, all other normal operating expenses are there.

• CNG BOOSTER COMPRESSIONS: with regards to CNG Booster Compressors, the business is picking up, but at a slow pace. So, it is picking up with little slow speed than our expectation. So, in quarter 3, number of units sold by us are seven units of Booster Compressors. So, the capacity which we have installed as of now is 250 units a year. And our expectation was to reach 100 units by FY ’24, but the demand which we were anticipating is little delayed because the companies who have been awarded GA are getting extension from government. And so there, implementation of this is getting delayed, resulting into the delayed demand on our equipment’s. At peak capacity at around this 250 units, Around INR 100 crores revenue can be done with around 18% EBITDA.