This Microcap stock which deals in the manufacturing of Large OD multi-start casing connectors, casing pipes, artificial gas lift equipment, wireline winches went up 4 percent in intraday trade after the company received an order from ONGC for Large OD casing pipe.
Price Action
With a market capitalization of Rs.562.40 Crores, the shares of United Drilling Tools Limited were up by 4 percent in the day’s trade touching a day’s high of Rs. 282 per share. The stock reiterated from the day’s high and was trading at Rs. 277 per share which is 2 percent higher than the previous closing price of Rs. 271.45 apiece. The stock has delivered negative return of 3.91 percent thus underperforming the Nifty Index in the same period.
What Happened
The stocks of United Drilling Tools rose after the company received an order from Oil and Natural Gas Corporation (ONGC) worth Rs. 55.2 crore for Large OD casing pipe with multi start connectors. The company is committed to complete the current order within the next 6 months.
Management Commentary
On the back of the order, Mr. Pramod Kumar Gupta, the Chairman and Managing Director said “It is with great pleasure that we announce the successful receipt of this prestigious order despite facing intense competition from industry leaders. We are excited about this accomplishment and remain committed to delivering the highest quality of products at unmatched prices.”
About the Company
United Drilling Tools Limited (UDT) is a prominent Indian manufacturer of oilfield equipment which specializes in drilling, exploration tools and production. The company was established in 1985 and they focus on delivering products that comply with international standards which includes API certifications.
Their business model focuses on innovation and cost-efficiency while offering solutions such as wireline winches and gas lift equipment to optimize oil production. They operate multiple manufacturing units and has expanded its global presence across 16 countries while fostering partnerships with major oil companies to improve its market reach and competitiveness. The company is the India’s first and only manufacturing company producing multi start connectors. As of March 2024, the order book of the company stood around Rs. 250 crore.
Financials & Ratios
Its Revenue from operations improved by 55.62 percent year on year from Rs. 31.39 Crore in Q2FY24 to Rs. 48.85 Crore in Q2FY25, accompanied by profits of Rs. 2.31 Crore to Rs. 4.14 Crore.
In terms of Return ratios, it has reported a return on equity (ROE) of 3.75 percent and a return on capital employed (ROCE) of 6.21 percent. It has a net profit margin of 7.22 percent as of FY24.
Shareholding Pattern
As of September 2024, the shareholding pattern with the promoter’s stake holding a share of 74.65 percent in United Drilling Tools, Foreign Institutional Investors (FII) holding around 0.68 percent, and public holdings standing at 24.67 percent.
Written by Santhosh S
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