This Oil stock deals in the business of providing Air & Gas Compression Services, Gas Dehydration Services, and Drilling and Workover Services were up 7.85 percent after the company bought a 100% stake in Indra Offshore Services for Vertical Integration.
Price Action
With a market capitalization of Rs. 3,602.24 Crores, the shares of Deep Industries Limited were up by 7.85 percent in the day’s trade touching a day’s high of Rs. 581.95 per share. The stock reiterated from the day’s high and closed at Rs. 562.85 which is 4.32 percent higher than the previous closing price of Rs. 539.55 per share. The stock has delivered around 115 percent return over the past year and outperformed the Nifty Index.
What Happened
The rise in stock price after Deep Industries acquired a 100 percent equity stake in Indra Offshore Services Private Limited dated on 15th January 2025. The target company is engaged in the business of Air & Gas Compression Services, Gas Dehydration Services, and Drilling and Workover Services. They are also engaged in the business of production exploration of conventional and unconventional natural gas.
The rationale behind the Acquisition
Deep Industries and the Target Company are providing Services of Air & Gas Compression, Drilling and Workover, and Gas Dehydration. Both Deep and Indra companies operate in the same industry, and the proposed investment is expected to bring operational efficiency and benefit Deep Industries in building vertical integration.
Guidance & Capex
The company has given revenue guidance to reach around Rs. 800 crore by FY26. Deep Industries expects a good amount of order inflow in the next 3 to 6 months considering the bidding pipeline of around Rs. 800 crore for traditional business. The company plans to go for the Capital Expenditure after receiving orders from the clients and currently, they have to incur Capex for the recently received ONGC order.
About the Company
Deep Industries provides oil and gas field services while specializing in natural gas drilling, compression, and project management. They are the first Indian company to provide high-pressure Natural Gas Compressors on a chartered hire basis.
Currently, the company is the largest private sector company in this segment in India and it holds a market share of over 95 percent in Air & Gas Compression Services. The company’s order book stands at around Rs. 2,622 crore and they have received multiple orders from Oil and Natural Gas Corporation.
Financials & Ratios
The Revenue from operations increased by 29.70 percent year on year from Rs. 101 Crores in Q2FY24 to Rs. 131 Crores in Q2FY25, accompanied by profits of Rs. 30 Crores to Rs. 42 Crores.
The company recognizes its operations under Oil and Gas Field Services as a sole segment as of September 2024.
Written by Santhosh S
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