During Monday’s trading session, the shares of a leading integrated solutions provider for Oil & Gas field operations surged 19.08 percent to hit a new 52-week high at Rs. 473.55 on BSE, after the company secured an order worth Rs. 1,402 crores from Oil and Natural Gas Corporation (ONGC).
With a market capitalisation of Rs. 2,996.5 crores, at 10:22 a.m., the shares of Deep Industries Limited were trading in the green at Rs. 468.2, up by 17.7 percent, as against its previous closing price of Rs. 397.65.
What’s the News:
According to the latest regulatory filings with the stock exchanges, Deep Industries Limited secured an order worth Rs. 1,402 crores from the Oil and Natural Gas Corporation (ONGC).
The contract is for the Production Enhancement Operations in the mature fields of ONGC’s Rajahmundry Asset and spans a duration of 15 years.
This is the largest project awarded to the company to date, more than doubling its current order book. As of 30th June, the company’s order book stood at Rs. 1,246 crores, reflecting a 12 percent YoY growth.
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Production Enhancement Contracts (PEC) aimed to increase hydrocarbon production from the ageing, depleted, and mature fields, typically spanning around 15 years beyond the original life of the asset.
At Rajahmundry asset, ONGC aims to develop hydrocarbon reserves from the Contract Areas further to improve current production and overall recovery of hydrocarbons by applying safe and efficient operating practices, along with suitable techniques and technologies.
“We are thrilled to announce this landmark achievement as we extend our expertise into Production Enhancement Contracts (PEC). The PEC framework not only broadens our revenue streams but also enhances our profitability, making it a value-accretive proposition for our stakeholders,” the company’s Managing Director commented.
Previous Orders:
On 13th July, Deep Industries bagged an order worth Rs. 82 crores from ONGC for Charter Hiring Of 01 Number Of 100MT Workover Rig for Tripura and 150MT Workover Rig for Rajahmundry, for a period of 3 years each.
On 23rd August, the company received a Letter of Award (LoA) worth Rs. 63 crores from ONGC for hiring of services for a skid-mounted modular type gas separation system and gas compression units including operation and maintenance (O&M) at Rokhia GCS Tripura Asset for a period of 3 years. Financials:
The company experienced significant growth in its revenue from operations, showing a year-on-year rise of around 22 percent from Rs. 101 crores in Q1 FY24 to Rs. 123 crores in Q1 FY25.
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Similarly, its net profit increased during the same period from Rs. 31 crores to Rs. 39 crores, indicating a rise of nearly 26 percent YoY.
On a year-on-year basis, the consolidated Earnings Before Interest, Taxes, Depreciation, and Amortisation, or EBITDA increased from Rs. 48.6 crores in Q1 FY24 to Rs. 61.4 crores in Q1 FY25, registering a growth of 26.4 percent.
With its diversified oil & gas services portfolio, Deep Industries covers more than 70 percent of Post Exploration Services in the entire value chain of the Oil & Gas Services Industry.
For FY25, the company has a planned capex of nearly Rs. 150 crores, with around Rs. 100 crores already underway.
The management has set a target for Returns on Capital Employed (RoCE) in the range of 14-16 percent.
Stock Performance
Shares of Deep Industries have delivered positive returns of nearly 74.6 percent in one year and around 76.7 percent in the last six months. So far in 2024, the stock has given about 80 percent of positive returns.
About the Company:
Incorporated in 2006, Deep Industries Limited is engaged in the business of providing natural gas compression services, drilling and workover rigs services, natural gas dehydration services, and also has forayed into integrated project management services.
Written by Shivani Singh
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