Deep Industries Limited (DEEPINDS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Deep Industries Limited Q1 FY '24 Earnings Conference Call hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Sana Kapoor from Go India Advisors. Thank you, and over to you.

Thank you, Seema. Good morning, everybody. Welcome to the Deep Industries Earnings Call to discuss the Q1 FY '24 results. We have on the call Mr. Paras Savla, Chairman and Managing Director; and Mr. Rohan Shah, Director of Finance and Group CFO. We must remind you that the discussion on today's call may include certain forward-looking statements and must be, therefore, viewed in conjunction with the risks that the company faces. May I now request Mr. Paras Savla, to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor to Q&A. Thank you, and over to you, sir.

Good morning, everyone. Thank you for joining Deep Industries Quarter 1 FY '24 Earnings Conference Call. I hope that you have got a chance to go through our earnings presentation and financial results that have been uploaded on the website and stock exchanges. We have commenced FY '24 on an exciting note by delivering strong financial performance. Our financial and operational performance has shown substantial growth compared to the same quarter last year. Before Mr. Rohan discusses the financial performance, let me throw some light on the strategic updates of the company. I'm happy to share that Deep's order book is growing consistently and has reached INR 1,160 crore. This represents a year-on-year increase of 52% and a quarter-on-quarter increase of 8%. Deep has been able to successfully increase its order book for the ninth consecutive quarter. Recently, the company secured a substantial order worth INR 130 crores from ONGC. The contract involves charter hiring of 90 metric tonne mobile drilling rigs with the integrated jobs. I'm pleased to share with you all that Deep has entered into 2 joint ventures recently with the objective to tap different opportunities in the oil and gas industry. One JV is with Focus Energy Limited through subsidiary, Breitling Drilling Private Limited, which aims to tap opportunities in higher capacity onshore drilling rigs in India. This JV helped in getting qualifications for the bidding certain rig projects and will also lead to synergy benefits to capture additional market share in higher capacity drilling rigs. Another JV is with Euro Gas SRL through a subsidiary, Deep Onshore Drilling Services Private Limited, which aims to carry out business of supplying oil field equipments to the oil and gas industry. Through this JV, we can achieve a synergy benefit to enter into niche business vertical of EPC. We are confident that this will open new opportunities for us to grow further and move 1 step closer to becoming one-stop solutions provider to the oil and gas industry. As you may recall, last year, we acquired Dolphin Offshore through the IDC route and began implementing our revival strategy. I would like to mention that the progress of the revival plan is going on as expected, and we are confident that H2 FY '24, Dolphin Offshore will start generating operational revenues. The integration process has commenced with the appointment of key managerial personnel and the board acquiring control of the assets and setting up the offices. Also, the refurbishment of major assets has commenced and is progressing as per the plan. I'm happy to mention that Dolphin has started getting expression of interest and is evaluating the best available option. Further, we are in process of getting Dolphin real estate on stock exchanges as per regulatory requirement and are expecting to get it listed soon. This acquisition of Dolphin Offshore will grant Deep with quick market access to offshore services, which otherwise would have taken at least 2 to 3 years to achieve the required qualification. This will also lead to diversification of the business verticals of Deep and synergy benefits from existing client relationships. Overall, I would like to say that Government of India is targeting to increase the share of natural gas in primary energy mix from current 6.5% to 15% by 2030 and is taking various measures such as expansion of national gas grid, expansion of City Gas Distribution Network, allocation of domestic gas to compressed natural gas transport, pipe natural gas into no cut category. Accepting recommendations made by Kirit Parikh, panel on domestic gas pricing guidelines for the same. All these initiatives that are focused to increase the production of natural gas will in turn increase the demand for services provided by Deep Industries and shall provide significant growth opportunities to the company. We also believe that bidding pipeline for Deep is very robust and will remain strong for the foreseeable future. With this, I would like to hand over the call to Mr. Rohan Shah, our CFO and Director of Finance, to take us through quarter 1 FY '24 financial performance. Thank you, and over to you, Mr. Rohan.

Thank you. Good morning, everyone, and thanks for joining today's call. I'll now represent a brief overview of our first quarter's financial performance, after which we will open the floor for questions and answers. For a fair comparison, we will be comparing the numbers on a year-over-year basis. Starting with the consolidated financial performance. I'm happy to share that Deep has performed extremely well compared to the same quarter last year. Revenue has increased by 39% to INR 101 crores from INR 73 crores in Q1 FY '23, primarily in line with our consistently growing order book and diligent execution of our orders with required operational efficiencies. EBITDA and adjusted PAT have increased to INR 49 crores and INR 30 crores, up by 52% and 54%, respectively. EBITDA margin and adjusted PAT margin for this quarter has improved from Q1 FY '23 and are strong at 45% and 28%, respectively. Coming to stand-alone performance, I am pleased to mention that like our consolidated performance, our stand-alone performance is also strong for this quarter. Revenue is up by 49% to INR 90 crores, whereas EBITDA and PAT are up by 51% and 53%, to INR 41 crores and INR 24 crores, respectively. Deep has shown improvement in financial performance, not only on a sequential basis, but also on a year-on-year basis. Deep's consolidated EBITDA and adjusted PAT showed an increase of 3% and 9%, respectively, on a Y-o-Y basis. Overall, Q1 FY '24's performance marks a positive start to FY '24. That's all from my side. We can now open the floor for question and answers. Thank you.

[Operator Instructions] We take the first question from the line of Mr. Manan Shah from Moneybee Investment Advisors.

And very big congratulations to Paras bhai and Rohan bhai for an amazing performance for the quarter. My question was regarding the JVs that we've entered, one with Focus Energy and one with Euro Gas. So you mentioned that Focus, we have entered, so that we'll be focusing on higher capacity rigs, and this will help us save us time in terms of getting the approval. So wouldn't this new JV also require to go through the approval process? Or does the JV partner, Focus Energy already possess the approvals, which will indirectly be applicable for this JV as well?

So this JV does not have anything to do with the approval. In fact, this JV would help us to qualify for bidding higher capacity of drilling rigs. Currently, what we have been drilling is up to 1,000 horsepower drilling rig tenders. Now we are focusing to get into 2,000 and beyond horsepower tenders. So since Focus has already got that experience, we have done a JV with them, which will enable us to get technically qualified and participated in all those tenders that we are looking forward to.

Okay. Understood. So we wouldn't have been able to do this by ourselves? Or I mean, is the operations very different as compared to what we do right now when the capacity goes up from 1,000 to 2,000 HP?

The operational philosophy basically is the same. But as we move to an higher capacity, the requirements of the tender goes in with that kind of an experience. So since we have not operated any 2,000 horsepower rigs, we need some qualification. And instead of waiting for that long, we thought getting into a JV would help us to get easily into this market, and that was the reason we did this JV.

So if you can throw some light on how big is the 1,000-plus HP market? And what would be the role of our JV partner over here? And what sort of investments will this entail for us?

The role of JV partner would be providing the technical know-how as far as the operations are concerned. Our role would be to operate the rigs with the technical guidance given away by the JV partner. 1,000 horsepower rigs currently, there are a huge amount of rigs already. They are already into the markets for quite long. And 2,000-horsepower rigs are also been running in this market for quite long. But if you see some of the areas like Northeast and Southern part of India, which have the deeper wells, they require a capacity with 2,000 horsepower. And we believe that in the days to come, these rigs would also get more popular. And that is the reason we got into this JV. So with this, the capacity, by looking to the kind of markets, I believe, easily I believe around 15, 20 rigs would be something that would be required in 2 years or 3 years down the line. And so that opens a great opportunity for us to enter into.

Understood. And the margins over here would be similar to the existing drilling business? Or it is better or what's off for it?

It is more or less similar to the one, but yes, the size matters a lot. I won't say it would be exactly the double. But yes, in a way, it would be close to 70%, 80% more rigs than what 1,000 horsepower rigs normally fetch. So it definitely would add to a lot of numbers in terms of revenue and also the margin.

Okay, understood. And the CapEx will only be post we win a order?

Yes.

Okay. Coming to the second JV that we did with Euro Gas. So this -- again, if you can just highlight what will be the role of our partner over here, whether this we are focusing on India or international business? And again, what sort of investment will be granted?

The scope of the JV partner will be as similar as what we mentioned in the Focus. It is providing the technical know-how. The idea to get the [ EPC ] business is largely only for India for now. And as we go forward, there are huge opportunities coming up. So in an oil and gas sector, there are a lot of activities related to the development of oil and gas fields, creation of gas gathering facilities, buying the equipment and doing the EPC jobs. So we believe with the kind of thing and experience that we already have that will enable us to go a step beyond and try and get into these activities, which will enlarge our scope of business into the oil and gas sector.

So the EPC business is different from the IPM that we currently do or?

The EPC business is different. IPM is integrated jobs. So when all the pool of services put together are offered for services, they are all integrated projects, which we are already doing. And an EPC is something that we build, create and then we transfer the facility to the client that is an EPC. But this won't be a typical EPC what the other company are doing. We are trying to focus only on our sector and our mastery where we have been doing this for 30 years. So we are focused only on those areas where we have a core competence.

So sir, how big is the opportunity -- what would be the opportunity for this particular market? Who are the existing players also who are there in this market?

There are a lot of players already predominant in this market. But what stands us apart is that we have the domain knowledge. We have been into this business for 30 years. As far as the market goes, I won't be able to put what kind of numbers and the prospects that would be. But to a limited understanding, these are huge prospects and which can change a lot of things within the company. So I'm not aware about the numbers of prospects, but it would be huge. It will be quite huge.

And this business will be asset heavy or asset light as compared to our existing business, which is a bit asset-heavy.

It would be asset-light because this would be like a procurement and then transferring. So it won't be on the asset-heavy model. It is basically an asset-light model.

Understood.

We take the next question from the line of Mr. Avinash Gorakshakar from Profitmart Securities.

Yes. I think Paras bhai and Rohan bhai, very good numbers, congratulations. I had 2 questions. One is on the Dolphin acquisition, you said possibly in the second half, we will be starting operational year. So I just wanted to know what is the kind of visibility on the order book for this company? Because as you mentioned rightly that there was a very strong kind of business profile for this company earlier. So if you could share some thoughts on what kind of orders company could get here? And secondly, I believe the company has got a large accumulated tax shield -- tax losses. So will that benefit the consolidated entity for the year FY '25?

Thank you, Avinash ji. I'll answer your second question first. So yes, that tax benefit will definitely be available to us, and it is a quite good in amount, so we can definitely take benefit of that tax benefit.

So it means for FY '25 tax benefit, if we get, does it mean, should we come into zero tax benefit? I mean, because 25% is normal tax, if we get the benefit of tax shield, can we assume that for FY '25, at least not FY '24, can we assume that tax will be more or less practically nil for the company?

Yes, practically, you can assume that. Correct.

And first question Rohan bhai, if you or Paras bhai can please answer.

So there are 2 approaches. Our immediate target for Dolphin is to revise the current assets that we already have. And the asset that what we are talking about is the Vikrant Dolphin that we have in Mexico. We are already undergoing the repairs and maintenance for that barge, and we expect that to be over in the next 2 to 3 months at the most. And we have already started looking for clients, and we have already got a lot of expression of interest in those territories. So we have not been able to freeze those numbers for now since the repair is going on, and we want the barge to be completely ready for -- on a way that could set us to revenue, but we are very, very bullish on this barge, and we expect that once it gets deployed, it would yield a great amount of revenue to us.

Okay. Paras bhai, just 1 more question. Basically, you said that in future, Dolphin also will get listed separately. So I just wanted to know that can we expect this listing to happen in FY '24 second half? Or will it happen in the first half of FY '25?

Yes, yes. We are expecting it to get it done in first half itself.

Okay. The first half of next year, that is FY '25, right?

First half of this year. So it will be listing soon probably in month's time.

[Operator Instructions] We take the next question from the line of Mr. [ Dhruv Vera ] from Virtual Securities.

My first question is on the natural gas part. So the natural gas dehydration has been on the same capacity utilization since a long time. So what kind of progress are we seeing in this segment? And how do you expect this segment to grow or what are the order pipeline or the order book in this segment which you have?

So yes, natural gas dehydration side, the demand is not that great as we were expecting. And so I think since last some time, the capacity utilization is a little low of our existing equipment. But our endeavor is to deploy our equipment on new contracts, which we have already bidded. And since our equipments were having a capability to operate in different environments as well and in different services as well, we will be able to deploy these equipments probably in coming time, yes.

Okay. And what kind of capacity utilization are we seeing?

So currently, it is around 50%, and we are expecting to take it to almost 75%, 80% in next 2 quarters.

Okay. Okay. Can you just tell me the segment-wise breakup of the order book vis-a-vis the revenues which you have booked?

So for us, is spread through all segments. Primarily, if I'll have to put it into segments, gas compression is around 46% of total order book. And rig segment is almost 42% of this order book. And rest is with other verticals like integrated project management and GD, gas dehydration.

Okay. And in the bidding pipeline segment, I mean, what kind of order book are we seeing or an executable order book from a 1 year's perspective?

For us, the orders in hand have a clear visibility of getting it executed in next 2.5 to 3 years. And the bidding pipeline, we can say that the bidding pipeline is as good as more than INR 500 crores of bids, and we expect them to get it converted into orders probably in next 1 quarter or so. So we expect some good amount of conversion into the existing bidding pipeline. And further, this bidding pipeline is consistently increasing month-on-month. So we are envisaging good amount of demand in our services going forward.

We take the next question from the line of Kashvi Dedhia from Centra [ Insights ].

Congratulations on great set of numbers. Sir, I have 2 questions. First will be on what is the segment wise revenue breakup for the current quarter? And second would be on the synergies. So due to the synergy, how much additional benefits are you expecting in terms of revenue, if you can -- revenue and EBITDA, if you can throw some light on that?

See, for revenue breakup for Q1, the revenue breakup is almost in line with what our order book is. If I'll have to put it in numbers, we have booked revenue from gas compression division of around 44%, from rig division around 40% and rest is from integrated project management and gas dehydration. With regards to your second question of synergy benefits, with this synergy, we have started bidding certain projects. And in fact, we have already bidded few. So once we get those orders in place, probably at that time, we would be in more confident position to say about some margins. But apparently, these businesses are as lucrative as what we are doing currently.

Okay. And sir, a second guide on CapEx, what will be our requirement in next 2 to 3 years?

In our business, CapEx is always driven by confirmed orders. So we do not anticipate any CapEx without a confirmed order in hand. So I would say, as and when we get an order, we do the CapEx. So probably it is hard to estimate for next 2 years because it all depends on award of contract, but tentatively, I would say in this current financial year, we can do CapEx of around INR 80 crores, INR 90 crores.

[Operator Instructions] We take the next question from the line of Mr. Gaurav Sachdeva from [indiscernible] Investments.

Congratulations for a great set of numbers. So management has been -- management has guided for the 20% revenue growth from -- but looking at the results and the JV we have done and the order book we have, are we likely to revise our guidance, maybe 30% or something like that?

With regards to guidance, we always been conservative. So we continue to be with 20% on a conservative basis. It definitely can increases what you are seeing. But as a guidance, we would continue as 20%.

Okay. And EBITDA will be in the same margin, sir? Above 40%, we can...

Yes. It would be almost in the same range. It can increase a bit, but yes, it would be above 40%.

Okay. And sir, just last question. What is the cost of this 2,000 HP rig, drilling rig?

It would be in the range of INR 80 crores to INR 100 crores, depending on the total requirement of client because the overall accessories requirement is differing from client to client.

Okay. And I think INR 1,000 HP is around INR 45 crores. I think you told in last con call.

Correct. Correct.

[Operator Instructions] We take the next question from the line of Mr. Vignesh Iyer from Sequent Investments.

Congratulations sir on good set of numbers. Sir, my question is on the order book side of it. The company is increasing its order book for almost like 9 -- last 9 quarters. So just 2 parts of it. If you could just let me understand out of this INR 1,160 crores order book, can I get a breakup of segment-wise as to which order belongs to which segment? And what is usually a typical execution time line for each of the segment?

See, for us, order book is on a continuous basis, like our services are 24/7, 365 days. So it's a concurrent order book, you can say. With an existing order book, our execution time is 2.5 to 3 years in total. And with regards to segment breakup, I have already mentioned in this call, whereas I'll just repeat the same. Gas compression is around 46%. Rigs division is having around 42%, and rest is with other verticals like integrated project management and gas dehydration.

Okay. And -- and then -- so I'm actually new to the company, but just to get an understanding. Do we -- any of these orders constitute export and what constitutes the domestic part of it?

Yes. So majority is domestic. There are a few orders of our international subsidiary, concluding part of this order book, which is you can say export in terms of it would be executed overseas.

Okay. Got it.

[Operator Instructions] We take the next question from the line of Rakesh Davera from 4 R Investments.

Congratulations management for the great set of numbers. My first question is regarding order book convertibility ratio. If I'm not wrong, we are increasing our order book on a consistent basis. But coming to the previous quarter like Q4 FY '23, the amount of order book we've got and comparing it with the revenue, we slightly decreased on the revenue. Can you throw some light on that?

Yes, our order book, the existing order book can be converted into revenue for 2.5 to 3 years. So this order book is consisting of I would say, more than 48 to 50 different awards or contracts which are being executed on a continuous basis. Revenue on quarter-on-quarter may have some -- depending on the jobs we do on client places. But overall, you can expect that this INR 1,160 crores can be executed over a period of 2.5 to 3 years.

Yes. Year-on-year basis, we have grown around 52%. So what is the guidance for the order book coming to FY '25?

So in our business space, we are expecting and we are envisaging good amount of demand for our services. And we believe this order book should grow further from this. And yes, we expect on a conservative basis, minimum 20% of growth.

Okay. Understood. And 1 more thing. What segment we are getting more orders?

Currently, we are getting orders from almost all segments, which we are operating. And order book is evenly spreaded over those segments, and it is increasing on all those segments.

Okay. Another question is regarding Dolphin acquisition. And what is the working capital requirement for that and CapEx installed actually?

Currently, we are in process of reviving the existing equipment, which Dolphin already had. So as of now, it is under CapEx mode only. And once we'll get our assets in class, then it will come for an operation and then working capital requirement. So for working capital requirement, it is early to say anything on it. But more or less, since they are part of oil and gas support services, it would be more or less in line with what we are having in our current business.

How much revenue?

With regards to CapEx, currently we are doing CapEx of around INR 35 crores for Dolphin.

How much revenue we expect from Dolphin with the synergy effect of Deep Industries?

From Dolphin currently, what we are doing the refurbishment job of a particular equipment. There, we are expecting a revenue of almost INR 90 crores to INR 100 crores a year from FY '25 onwards.

[Operator Instructions] We take the next question from the line of Mr. Sudhir Bheda from Right Time Private Limited.

Congratulations on a very excellent set of numbers, sir. Congratulations to all Deep team. Sir, my first question is whether this kind of run rate is maintainable in the current year, '23-'24?

Yes. The way our bidding pipeline is built and the expectation of conversions are quite good. So we expect this run rate should continue in current financial year as well.

Great. Great. And sir, when we see the March balance sheet, your debtors were very high. So I believe that it is -- some debtors belongs to Dolphin. So what is our working capital position right now and liquidity position?

Correct. So our debtors, they are in range of 100, the debtors which are appearing on consolidated balance sheet on March '23. It includes almost INR 142 crores of debtors from Dolphin as a whole. So I would say our regular business is having debtors of 100 only.

That's great. And what would be the net cash on hand as of now?

It is almost INR 100 crores.

Great. Great, sir. Once again, congratulations, sir, and all the best. And thanks for the opportunity given to me.

[Operator Instructions] We'll take the next question from the line of Sajan Joseph, an individual investor.

I had 4 questions, 2 of them related to Dolphin and 2 for Deep Industries. Regarding Dolphin, is that we are looking at listing Dolphin. I wanted to know the advantage of listing Dolphin? And after we list, how much percentage of holding with Deep Industries have?

So since Dolphin was already a public listed company, we try to continue its listing as per our approved dissolution plan. So we will be holding 95% in Dolphin Offshore, and 5% is still with general public. So eventually, over a period of 3 years, we'll have to dilute our share to 75%.

The other question about Dolphin Offshore was the barge that is being repaired. You said the cost for repairs is going to be around INR 35 crores. How about the manpower? Have we started hiring for people?

Yes. So those activities have already started in parallel. So we have already started for -- started scouting for the required manpower and the agencies which can help us in managing this entire operation.

Okay. Regarding Deep Industries itself, you have been in the operations for 30 years. Have you seen this kind of an order book buildup previously? And when was that?

So I am happy to say that the current order book is highest ever for us. And the run rate which we are seeing since last 9 quarters is also for the first time for us.

Yes. The [ question ] quite incredible, sir, on what is causing this change? Is it more spending by the PSCs?

Sorry, I didn't get it.

No. Sir, I'm saying congratulations on the high order book. What is -- why is this order book so high? And -- is it because the public units are spending more? Or is it government policies that are causing for this change?

In overall industry, the demand of our services is increasing year-on-year. And if you have looked on overall outlook of natural gas, so today, entire country is after natural gas production increase because currently, even today, we are importing almost 53% of our demand of gas and we are such an energy deficient country. So the focus is to become energy sufficient, and our government is also pushing hard to become energy sufficient. So we believe the demand of natural gas processing in all other vertical of hydrocarbons, it is increasing year-on-year, which we are getting benefit. In addition to that, the service provider in this industry are very few, and some of them has already exited the market. So that is also helping us to grow our business.

Okay. I understand. And who are our customers? In your past conference calls, you have mentioned ONGC and [ Ceylon ] is HOEC also of our customer, like who are our major customers?

Our major customers are ONGC, Oil India, Vedanta, Assam Gas, Chennai Petroleum. HOEC, we had provided services in past. Currently, we are not doing any business with HOEC. [ Ceylon ] is also 1 of our larger clients.

Okay. I wish you good luck for all the exciting things that you are doing, sir.

[Operator Instructions] We take the next question from the line of Mr. Parin Gala from SageOne Investments.

Sir, our capital employed in the company would be to the tune of INR 1,100 crores to INR 1,200 crores, including that intangible, is that number correct?

Correct. So it includes that intangible part of goodwill, which is around INR 400 crores.

That's right. So even after removing the intangible and whatever capital employed we have, if you see the ROCE of a company despite doing great margin, everything is in very low double digit or single digit at times. I understand it's a asset-heavy business currently. So just wondering that is there a way when we are doing the rig business, when we get some orders, we can also take it on higher end and then we deploy on the yields and make it a little better ROCE business going forward. Is there any plan to improve our ROCE sir?

So yes, I would agree with you, to it. So our current ROCE is around 12%, of course, adjusted after the goodwill effect. But yes, as you rightly mentioned, we are into asset-heavy business because our services are being provided with the help of equipments, which are little costly. So we have consciously started focusing on improving ROCE and probably the asset-light model is 1 of the idea, which can improve your ROCE further, but the problem with asset-light model is your operating margins then gets hampered because of asset light. So we are trying to balance how we grow this further. In our business, the life of assets is more than 20 years. So at any particular point in time, if you calculate the ROCE, it looks a little low, but if you look from the perspective that the same capital employed we can earn revenue for next 20 years, then probably the correct perspective would come.

Yes. So from an investor perspective, on a 20-year basis, it's very difficult to do the math, right? I mean, you get what I say. So in that perspective, I was just wondering.

No, no, I agree. The only assets in our business -- assets are capital intensive, but they are having good amount of life as well.

So as best, so what number you could do in the next 2, 3 years, 4 years?

So we are targeting to take it closer to 20% in next 2, 3 years.

20%?

20%.

You can give some clarity on how this can be achieved?

So as I said, 1 of the option in our mind is asset light. So if we are -- instead of owning equipment, if we go on leasing of them, this can definitely give an immediate impact on ROCE.

Okay. Sure, sir. Sir, last question, again, on the intangibles, I understand that you would be doing a fair valuation every year or something and impairment is required. Any guidance on probably this will be impaired over the next few years and all understanding? I don't know the nature of the intangible that is why I'm asking. Could there be impairments coming through?

No. So since last 2 years, there is no impairment is coming as per the impairment study by a separate valuer. So I'm not sure in what amount of years it can be impaired.

And this intangible is created because of the demerger, right?

Correct. It has been created in form of goodwill as a part of demerger.

[Operator Instructions] We take the next question from the line of Mr. Ankur Kumar from Alpha Capital.

Congrats on a good set of numbers. Sir, you talked about strong order book, but you also talked about 20% growth only. So what is our thinking on the growth for this year?

As I said, for growth guidance, we have always been conservative. And as I said, 20% is a conservative number, which we are spelling out. The order book is excellent and conversion is also as per our expectation. So we always believe in seeing less and performing more.

Got it, sir. And sir, in this current quarter, there is an impact of monsoon, which is generally there. So what kind of expectation can we build in for this current quarter? Will it be much lesser than the INR 100 crores that we are doing on a consolidated basis?

Yes, there will be some impact. Generally, monsoon effect is largely impacted on integrated projects. And this year, in our overall revenue mix, integrated project has a little less contribution. So we are not expecting some major impact. It would be some amount of percentage would be there.

Got it, sir. And sir, on the Dolphin side, you're saying, we are expecting listing in about a month or 2?

Correct. It was already listed company, but due to insolvency, it was under suspension, so we are getting it re-listed.

Got it, sir. And Dolphin, you're expecting revenue to start from second half? So any expectation we can build in for this year and the next year on the revenue and margin side?

See, since we are in process of reviving the company, putting any number would be a little difficult or I would say it would be a little early. But yes, we are expecting to start contributing into revenue from second half onwards. So to what extent and how much it will get contributed. It's a little difficult. But on a broader terms, if you want to know, it can be somewhere in between INR 30 crores to INR 50 crores this year.

[Operator Instructions] We'll take the next question from the line of Mr. Manan Shah, Moneybee Investment Advisors.

I wanted to this -- you highlighted about INR 80 crores to INR 90 crores of CapEx for this year. So towards which segment will this CapEx largely be?

So currently, we are doing CapEx of 1 drilling rig, which we have received an order of INR 130 crores.

Okay.

So that would be around INR 40 crores odd, INR 40 crores around. And other than that, we are doing CapEx of compression part as well. So that would be around INR 20 crores. And rest is depending on the new awards, yes.

Okay. And during this upcoming quarter, any new contracts, which are expected to commence execution?

New -- sorry, I didn't get it.

For this coming quarter, any new orders that we've won, which will commence execution?

So there is 1 compression contract, which is under mobilization stage will start adding into revenue in current quarter.

Okay. And for the year, any major contract which is expiring?

For our business, expiring, it is a rotational contract. So expiring would not have that impact because it will again be deployed in next contract, but no major such contract because all our major drilling rigs are for 3 years now. We are already deployed on 3 years contract already. And other than that, there is no major completion.

So based on that understanding our current quarterly run rate is only expected to go up from current INR 100 crores to probably INR 110 crores or INR 115 crores?

Yes, we are positive of that.

Okay. Any sort of target order book that we are looking to end the year with? I mean, internally, any ambition or something that we are looking to end this year with, say, INR 1,200 crores, INR 1,300 crores, or INR 1,500 crores sort of an order book.

Manan bhai, expectations are huge, but we cannot quantify that. But yes, we'll definitely end up with quite good number.

Okay. And lastly, on these 2 JVs. So you mentioned that we have already started bidding for contracts over here, right?

Correct.

So what is an average order size over here in each of these JVs?

Single contract can be in the range of INR 150 crores to INR 250 crores size.

Okay. And we can expect some positive wins during the year only?

Yes, we are hopeful.

Okay. And mobilization of these orders will take anywhere between 6 to 8 months as usual?

More than 6 months, correct?

Okay. Would it be faster than the EPC JV? Or over there also, it will take 6 to 8 months?

There also, it would be more than 6 months, yes.

Okay. Okay. Also, lastly, on the receivables of Dolphin. So what sort of process have we started for recovery of this INR 140-odd crores and anything that you are expecting during the year?

We have already started following up wherever the recovery is possible. In few cases, already arbitrations are going on and in -- these awards are also -- arbitration awards are also expected to come. So yes, we are hopeful that some good amount out of this should be recovered in this financial year.

Okay, understood. And the CapEx of INR 35 crores will largely be capitalized, right? Or it will be expensed out, the refurbishment.

Capitalized.

Capitalized. Okay.

Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for closing comments.

Thank you all for joining the call. In the end, I would like to say that a zero net debt balance sheet, healthy liquidity position, strong and growing order book, diversification to offshore business and entering into joint ventures to tap new opportunities in oil and gas industry augurs well for the growth and success of Deep Industries. We hope that we were able to resolve all your queries. If you still have any follow-ups, please feel free to reach out to us or to our Investor Relations, Go India Advisors. Thank you all.

Thank you, sir. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. .