Synopsis:
Deep Industries shares surged over 7% after bagging a Rs 97 crore work order from Oil India, which has to be executed within seven years.
The shares of this leading small-cap company are in focus after it bagged an order from Oil India worth Rs 97 crore. In this article, we will dive deeper into the details of the order.
With a market capitalization of Rs 3,281 crore, the shares of Deep Industries Ltd are currently trading at Rs 513 per share, down by 18 percent from its 52-week high of Rs 624.50 per share. In the last year, the stock has delivered a robust return of 60 percent.
Deep Industries Ltd has bagged a Letter of Award from Oil India Ltd to provide a brand-new Workover Rig on a charter hire basis. This rig is set to work in Assam and Arunachal Pradesh, with a total estimated contract value of Rs 96.72 crore. It’s a domestic contract that will be executed over the next seven years.
So, what does a Workover Rig on charter hire mean?
Essentially, Deep Industries will be renting out a fully-equipped rig along with its services to Oil India for a specified duration. These rigs are crucial for maintaining or repairing oil and gas wells that have already been drilled, ensuring they run smoothly and efficiently.
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Financial Highlights
The company delivered a revenue of Rs 576 crore in FY25, up by 35 percent from its FY24 revenue of Rs 427 crore. However, on a profitability front, the company reported a net loss of Rs 79 crore in FY25 as compared to a profit of Rs 125 crore in FY24.
However, it is to be noted that the company reported an operating profit of Rs 231 crore in FY25, but because of its negative other income of Rs 219 crore, its profitability was impacted.
The stock delivered an ROE and ROCE of 8.20 percent and 11.70 percent respectively, and is currently trading at a P/E of 24.54x as compared to its industry average of 28.54x.
Deep Industries Limited is an Indian company that specializes in providing a range of services to the oil and gas industry. They offer everything from air and gas compression to drilling and workover services, as well as gas dehydration, conditioning, and processing.
Additionally, the company takes care of integrated project management and provides equipment and services for rent or charter hire. These offerings are designed to help oil and gas companies operate more efficiently.
Written by Satyajeet Mukherjee
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