Deep Industries Limited ($DEEPINDS)

Ladies and gentlemen, good day, and welcome to the Deep Industry Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions]. Please note that this conference has been recorded. I now hand the conference over to Mr. Rohan Barnor from Arian Capital Markets Limited. Thank you, and over to you, sir.

Hello, and good afternoon to everyone. On behalf of Arihant Capital Markets Limited, I thank you all for joining the call into the Q4 and FY '26 Earnings Con Call of Deep Industries -- today from the management, we have Mr. Paras Savla, Chairman and Managing Director of the company; Mr. Rohan Shah, the Director of Finance and CFO of the company. So without any further delay, I'll hand over the call to the management for their opening remarks. Over to you, sir.

Good morning, everyone, and thank you for joining us today to discuss our performance for the year ended 31st March 2026. We sincerely appreciate your continued interest and confidence in Deep Industries. I trust you have had the opportunity to review our financial results, press release and investor presentation, which have been made available on the company website and stock exchanges. I'm joined today with our Director, Finance and CFO, Mr. Rohan Shah, who will take you through the financial performance for the year ended 31st March 2026 in detail after my remarks. Let me briefly take you through India's macroeconomic environment and the evolving dynamics of the energy sector. The oil and gas sector is transitioning from a period of crisis management to a structural rebalancing. While 2026 was dominated by the shock of Strait of Hormuz closure, FY '27 is expected to see a demand rebound as supply flows normalize. According to current projections from EIA and OPEC, global oil demand is set to grow by 1.6 million barrels per day in 2027, reaching a record high of 106.2 million to 107.8 million barrels a day. Asia remains the primary driver of incremental demand, but the sentiment is one of energy security overhauls. A massive push is expected in FY '27 towards natural gas as a bridge fuel. India and China are aggressively expanding LNG regasification infrastructure to reduce reliance on volatile crude markets. India has rationalized royalty rates for oil and gas companies under the Oilfields Regulation and Development Act to boost growth in the upstream sector. Just this month, May 2026, the government slashed royalty rates to attract global majors and incentivize domestic players like ONGC to tackle difficult fields. Royalty is now calculated on valet price with a fixed deduction of 15% to 20%, removing the long-term -- long-standing disputes over post-production cost deductions. This marks a new era for India's oil and gas sector by removing long-standing inconsistencies in the royalty framework. To increase domestic production by FY '27, the Indian government has pivoted from a revenue sharing mindset to an exploration first strategy. The goal is to reverse the decade-long decline in crude production, which dropped to 28.4 MMT in 2024, '25 and hit the ambitious target of reducing oil import dependency. The government has launched special CGM rounds in 2025 and 2026. These unconventional sources are expected to start feeding into the national gas grid by early 2027, particularly in the Eastern states. One of the most aggressive moves in the 2026 strategy is the shrinking of no-go areas. Huge swath of the Indian exclusive economic zone that were previously restricted due to defense or environmental concerns, nearly 1 million square kilometers have been opened for seismic service and drilling. One nation, one grid. The strategy isn't about digging, it's about moving the product efficiently. Unified pipeline tariff implemented to ensure that a factory in a remote area pays the same gas transport rate as one near a terminal. This incentivizes E&P companies by ensuring there is a steady national market for their gas. India's gas pipeline network is crossing 25,000 kilometers in 2026, aiming to connect almost every state to the national grid by the end of FY '27. With the vision of our honorable Prime Minister, Shri Narendra Modi for Atmanirbar Bharat, country is actively pursuing investments for its exploration and production sector as a part of broader USD 500 billion opportunity in its energy infrastructure by 2030. We are strategically positioned to capitalize on this opportunity, reinforcing our commitment to national energy security and long-term value creation. Now I'll take you through the operational performance highlights and business momentum. During FY '26, Deep Industries continued to deliver consistent operational performance with a sharp focus on safety, execution discipline and asset reliability across all operating sites. Across our core service offerings, onshore drilling, workover services, gas processing and production enhancement, asset utilization remained healthy during the quarter. Continued policy thrust on expanding exploration acreage, strengthening gas infrastructure and enhanced [indiscernible] integrated oilfield services. Our order book remains robust, revolving consistently over INR 3,000 crores, providing multiyear revenue visibility and reinforcing confidence in our long-term growth outlook. On the business updates, with regards to Kandla Energy & Chemicals Limited, we had acquired the company in the corporate insolvency and resolution process in March 2025. The intent for this acquisition was to do a backward integration, enabling the management to source the chemicals and hydrocarbon fluids in-house that was manufactured by Kandla. Kandla was eventually merged with Deep Industries Limited effective from 30th March 2026. The appointed date of the scheme is 31st March 2025. Following the acquisition of Kandla in March 2025, management adopted a conservative accounting approach regarding inherited trade receivables. The company deferred the recognition of certain legacy receivables pending a full recoverability assessment. We initiated a comprehensive 12-month reconciliation and recovery program to validate the collectability of these old trade receivables. After the year of intensive collection efforts and due diligence, it was determined that these old trade receivables do not meet our criteria for realization. Consequently, to ensure a transparent and high-quality balance sheet as a part of our balance sheet strengthening exercise, the company has elected to write off these legacy trade receivables. This nonrecurring and noncash adjustment reflects our commitment to financial discipline. This has not impacted our core cash profitability in FY 2026. Our net cash flow from the operating activities have been increased to INR 270 crores in FY '26 from INR 210 crores in FY 2025. In January 2026, a gas leak occurred during workover operations well modified in Andhra Pradesh under our production enhancement contract. Our emergency protocols and robust safety systems enabled a swift response in close coordination with ONGC and regulatory authorities. The situation was fully contained within 5 days. We are pleased to report that there were no injuries or loss of life. While the incident has resulted into a 5- to 6-month shift in our production enhancement time line, keeping safety as our highest priority, our focus remains on resuming production enhancement operations and meeting our long-term output targets. On strategic priorities with strengthened leadership team, the company is now set for continued growth for operational excellence and innovation. We are confident of sustainable growth in years to come by capturing new opportunities and deliver long-term value to our stakeholders. In closing, we will continue our efforts on adopting best corporate governance and highest safety standards. Further, I would like to show our gratitude towards our employees for their dedication and professionalism, our clients for their continued trust and our partners for their collaboration. We also thank our investors for their ongoing support and confidence in these industries. With that, I now invite Rohan to take you through the financial highlights for quarter 4 and FY '26. Thank you.

Thank you, Parasbhai. Investor friends, thank you for joining the call today. Happy to share with you another excellent quarterly and full year performance of Deep Industries Limited, reporting growth of more than 50% year-on-year. All the comparisons are on year-on-year basis, which would provide a fair evaluation. As already mentioned by Parasbhai, under exceptional items, we have taken write-off of around INR 208 crores of Kandla legacy trade receivables after intensive recovery process. However, the sale write-off has not impacted our cash flows. With regards to operational revenue for Q4 FY '26, it has rose to INR 248.7 crores, up by 49% year-on-year. For full year operating revenue jumped by 55% to INR 891 crores. The strong growth momentum in top line comes from execution of our orders as well as consistent new order flows. Control over costing and operational efficiencies have helped us post 71% year-on-year growth in EBITDA to INR 106.5 crores in Q4 with EBITDA margin of 39% for full year EBITDA has shown growth of 44% to INR 124.2 crores. Net profit for the fourth quarter, excluding onetime exception item net of tax was at INR 148.6 crores and for full year net profit, excluding onetime exception item net of tax stood at INR 352.9 crores. Cash profit for the year stood at INR 442 crores with cash profit margin of 46%. Our return ratios have also improved significantly in this year. Our adjusted ROE reached to 21.8% and adjusted ROCE has reached to 19.2%. Our debt-to-EBITDA ratio has improved and remained very strong at 0.48. Our order book consistently revolving at INR 3,000-plus crores gives us a clear visibility of growth in coming years. Through strategic diversification and expanded overseas operations, we have successfully reduced our single client dependence to below 40% of total operating revenue. As we look ahead to FY '27, Deep Industries is well positioned for bright and promising future with excellent growth, building our strong performance in recent years. We are confident in our ability to maintain this project -- this positive trajectory. As Parasbhai said, our success is driven by a solid foundation and operational excellence, a sharp focus on cost optimization and steadfast commitment to innovation. These strengths enable us to seize new opportunities as they arise in the energy sector. With this, I now open the forum for question.

[Operator Instructions]. The first question is from the line of Sudhir Bheda from Bheda Family.

Congratulation to all the management for the excellent show for the FY '26 and also for taking the -- or trimming the balance sheet and making it . My questions are whether all the receivables are written off or still legacy debtors are still pending? And if it is pending, what are your views, why it has not been written off?

So we have written off all old trade receivables of Kandla Energy. With our extensive effort of recoverability, we decided that it is not recoverable anymore. And so we decided to write off those old trade receivables of Kandla. With regards to other legacy trade receivables of Dolphin, we have kept them outstanding in our books considering the arbitration awards received in our favor. So out of total INR 160 crores of Dolphin Group trade receivables, we have a good amount of arbitration award in our favor. And considering that as well as the client relationship, we are very optimistic on recovering all those trade receivables, and that's how we have kept them outstanding.

So if you remove that legacy receivables of Dolphin, then our debt numbers are quite lower, right, much lower than reported.

Yes.

And sir, with the kind of order books we have, so what kind of growth do you project for next 2 years, like FY '27 and FY '28?

So with the current trend that is going on, we are quite optimistic that this trajectory of growth that has been witnessed in past few years should keep continuing. But our sense is that it could be more than 25% to 30%.

Great. So that still on the higher base, it will continue -- will continue to grow at a healthy pace?

Yes.

So that means that FY '28 can we see a profit of maybe INR 450 crores or INR 500 crores kind of -- is it possible?

So with the growing trajectory, I don't see that to be an issue or to be a concern because the growth has already been demonstrated for past few years. And with the current situation that has arisen in relation to the crude oil, I think India has put a lot of focus on drilling activities and trying to produce more of oil and gas. So definitely, this will enhance our business opportunities. And keeping that in mind, I think that could be quite possible.

Great. And sir, last question. Now recently, government has come out with the coal gasification scheme. So do we qualify for that? Do we have a technology for coal gasification? Or it is like can we are planning to venture into this...

Various areas where company is actively looking into it. One of that, as we had already mentioned earlier that we were exploring the possibilities of green hydrogen projects. Having said that coal gasification, geothermal is something that is aligning to our business activities. So going forward, we might -- so we have already started looking into it. And at an appropriate, we may look into this with a strong commitment as we go forward.

Great, great. And if you allow, sir, last question. So now there is a delay in production enhancement scheme. So then will you trim down the project or you are still that whatever target you have set for FY '27, that will be achieved for production sharing contract?

So as I mentioned, because of the incident that took place, our activities have been a bit delayed for a quarter or 2. Once -- I think we should be regularizing maybe a month or 2 more. But going forward, these numbers or the projections that what we have should come around. Maybe it will have an impact of maximum, as I mentioned, 1 or 2 quarters, but everything else is just intact.

The next question is from the line of Manan Shah from Moneybee.

Congratulations for good set of numbers. My first question was on Dolphin. So in this quarter, we have seen a spike in the revenues of Dolphin as well as on the expense side. So can you provide some light of what has transpired in Dolphin in the current quarter?

Yes. So in Dolphin, we had a good quarter in terms of revenue. So our revenue has jumped up. And along with it, it was some expenditure has also been risen. So there was one opportunity ongoing where we had some higher rates in between the contract. And so with that higher rates with gross revenue, the expenditure was also rose to the...

Compare results to the December quarter where we were having net of expense revenue and margins, the profitability was much healthier. So I mean, taking this opportunity, overall, our profitability was impacted rather than being positively impacted.

Yes, yes. So overall profitability in terms of actual profit would remain intact. Probably in terms of margin, you will have seen a little decline. But if you look from profit perspective, it would be in line.

Okay. Okay. My second question was in terms of the -- in the presentation, we are talking of getting into higher HP drilling rigs. I believe you're talking about 2,000 HP. We have tried this earlier also via a JV. So this is the same opportunity that we are again reexloring? And what gives you the confidence of qualifying this time?

So these tenders have been coming in the past, but we believe that as we go forward, the kind of inquiries that could be floated from our clients would be much higher in numbers. And we are sure with the qualification, we would surely qualify for the same.

Okay. So this time, we'll be doing it by ourselves or again, we are going to be doing it via a JV?

Of course, it would be via JV.

Okay. And what is the current bid pipeline?

It's close to around INR 50 crores, INR 60-odd crores.

Okay. My next question was on the PC contract. So there has been a stop production order given by the APPC over there on the Modi 5 well. So I wanted to understand whether the enhancement of production in this particular -- how critical was Modi 5 in that entire plan? And how do we plan to then get around this stop production order over there?

This stop production order was given only for this particular well, which is already in a question. So we have already shut off this well for now for all the compliance and regulatory matters. In short span of time, we may try to keep this well activated, but that is again in the eventuality or in the passage of some time. So it is difficult for us to really comment on this. But barring this stock order, this was restricted only to that particular well. All our other activities related to other wells and the areas for gas production, they are completely intact, and we are still producing gas and we are selling the gas.

Okay. So despite the stock production for this particular well, we are still confident that once the operations commence, we should be able to get to that run rate of INR 120 crores to INR 150-odd crores from this particular contract?

Yes. So we are already doing some amount of -- I mean, a reasonable amount of gas production. But as I mentioned, there is a gap of around 1 or 2 quarters for the equipment to be hired and put back to production. So once we have that, it will again regain to what our original projections were.

Okay. My next question was on that one of our rig was damaged, I believe, the workover rig. And because of that, we had force majeure and then we were not able to participate in the workover rig contract. So any update over there? Are we now able to participate in the new workover rig contracts?

Both the fire incident -- sorry, or the incident of the rig that was damaged is a separate issue, but those matters are currently under active consideration, and they are going through the formalities. So we are very confident that in short of time, we'll have that clarity coming in.

Okay. Understood. And my last question is on the overall order book. You gave a very good overall macro picture. But when should we see that translating into incremental order flow for the because our order book has stagnated at around this INR 3,000 crore odd level for the past 4, 5 quarters. So when can we see the macro demand finally translating into orders and which sector -- which of the various work that we do, whether it is drilling or gas compression or gas dehydration or the gas processing, where do you see the potential out of all these sectors?

You would have seen the last 4 or 5 quarters, there was a significant amount of the major order that was coming out through the way of PEC. So if you see even if that considering that INR 3,000 crores of order book, the kind of implementation or the kind of execution that is done, that has again remained stable. So which means there has been an active flow of orders that have come, and that's how the order book has remained same. But having said that, there are new PCs also coming up. And as I also mentioned, the new opportunities of the higher capacity rigs and all that put together will definitely give an indication of higher order book. So maybe in some quarter or 2, you would see that numbers also coming quite above what the current levels are.

[Operator Instructions]. The next question is from the line of Manan Bandhur from Old Fund Management.

I have 3 questions. Sir, out of the bid pipeline that we have of INR 500 crores to INR 600 crores, does this also include PC? And if not, then how are we looking towards more of PC contracts?

So this INR 500 crores to INR 600 crores bidding pipeline is consisting of bids already submitted. With regards to PEC, one recent tender has came up, which is yet to bid. And so to answer to your question, PC is not included in this bidding pipeline.

Okay. And that recent tender, sir, how much could that be? And is the competition for us?

So as of now, it has just came last week only. So we are just evaluating. So in terms of value, probably we'll not be able to quantify as of now. But yes, we stand very good chance as we are quite capable of executing this kind of contracts with in-house assets and expertise. And this tender is also for 15 years.

Okay, sir. Got it. And sir, just 2 more questions. Sir, do we hedge against the dollar for all of our contracts? Otherwise, it would become beneficial for us if the INR depreciates. Do we do that?

So no, we do not hedge because rupee is constantly depreciating. So at the end of day, it is in our interest. And so we have kept those dollar receivable position open.

Okay. That is really good to hear. And sir, just last question. Sir, does the price of crude oil affect our order book in different segments like dehydration compression, PC because our PC contracts are linked with crude oil production. So I think the last PC contract that we took of ONGC, it was around INR 1,400 crores or something. And that I'm assuming the crude oil, our realization would have taken at $70 or something. So now it is $100. I understand it can come back down. But overall, let's say, this keeps on hovering 90, 80 or whatever it increases. So does that also affect our order book and increase our...

Yes, definitely. Because in PEC, we are having a free gas price mechanism. And as you rightly said, with increasing gas price, this order book can increase upward. With regards to the first question of crude oil impact, so other than PEC in our services business, we do not have any direct impact of crude oil price. But yes, sentiment definitely helps us in increasing the demand of services.

Okay. So gas prices help us, not crude oil prices, correct?

Both in a way because our drilling rig drills well for both oil and gas.

Understood. Understood. And just a clarification, last thing, not a question. Sir, one of the previous participants asked around FY '27 PAT could be around INR 400 crores plus. So just a clarification did I hear it right or wrong?

Yes. So I think the earlier participant was asking about FY '28. But the way we are growing, we are quite optimistic to grow around 25%, 30% year-on-year even in '27, '28 as well.

The next question is from the line of Harish Shah from Seven Rivers.

Sir, just following back on Dolphin Offshore. While our revenue has grown up sequentially from INR 30 crores to INR 45 crores, EBITDA in absolute terms has also come down significantly from INR 22 crores to INR 12 crores. So I mean, if you can clarify a bit on that because other expense at INR 16 crores is significantly higher. So is there any one-off in this quarter? Have we preloaded any expenses, which is not expected to recur in subsequent years? How should we look at EBITDA for Dolphin now?

Yes. So with regards to Q4, we had one-off item of ECL, which is expected credit loss provisioning of around INR 10 crores. And I think that is a one-off item. If you exclude that, then margins are in parity.

Okay. So even if you exclude that, our EBITDA is at INR 22 crores. Now revenue has gone up from INR 30 crores to INR 45 crores, but EBITDA has remained at INR 22 crores. So what explains that?

Yes, as I said earlier, there was one opportunity where we had charged the gross rate instead of net. And in that, our revenue was higher, but parallelly expenses were also higher to some extent in some of time period during Q4. And I think that impact is appearing. Otherwise, on absolute number basis, they are intact.

But at INR 30 crores, we did INR 22 crores EBITDA, that incremental INR 15 crore revenue should have some profit, right, INR 3 crores, INR 4 crores even if expenses .

No, at the end of day, you are dealing with an equipment which needs repairing over a period of time or within the contract period, there are some breakdown or repairing works coming on and off. So for us, probably we always believe that our performance should be evaluated year-on-year basis, not on quarter-on-quarter because it may happen that in one quarter, you have higher repairing expenditure. In quarter, you have a very low repairing expenditure and all. And so ideally for my business in terms of charter hiring, I think year-on-year evaluation is more effective.

Fair enough. Fair enough. And sir, we did revenue of almost INR 900 crores. And from what I believe our order inflow for the year was somewhere around INR 950 crores. Now since we're guiding 25% kind of a revenue growth, which comes to roughly around INR 1,100 crores, do we expect corresponding increase in the order book inflow as well? So just to keep that rolling revenue visibility intact?

Yes. So we are expecting some good amount of order to come in, in current financial year. I think Paras bhai was just mentioning about higher capacity drilling rigs and new PEC contracts and all. So the order inflow or I would say, bidding is exceptionally increasing well. And we are hopeful optimistic that this order book will also improve quite a good from this number.

And sir, how do we expect the mix to change going ahead? Are we bidding more for gas processing or more for drilling or it will be more on the IPM side?

As a matter of fact, we would try to bid as the opportunity comes within our focus sectors. So it is very difficult to identify that which vertical or which sector would be doing how much. As we speak, to us, I think every sector in the -- in oil and gas business is growing in more or less the same symmetric. So I think we have to still wait and see how the numbers are getting -- numbers are going to reflect or in the order book. So it's just the order book that we have to keep watching. And then probably maybe at the end of the year, we can make some assessment on which sector bid how much.

The next question is from the line of Sanjay Shah from KSA Securities.

Congrats on great set of numbers. So my question was regarding how much operating leverage is still available from the existing assets before any major CapEx cycle?

So with regards to rig segment, our assets are 100% utilized. And so with any new order coming in, we'll have to do CapEx of new rig. With regards to gas processing segment, we have still availability of around 12%, 15%. So till that extent, we may use our available fleet. And post that, we'll have to go for CapEx.

So what is the management top 3 strategic priorities for next year.

See, if we talk about top 3 priorities, of course, PEC is one. Second priority for us is higher capacity drilling rigs. And third priority definitely to add fleet into offshore segment as well. So largely, these 3 sectors or 3 priorities we are working on for coming year.

So sir, what is the road map of Dolphin Offshore and our international subsidiary offshore opportunity pipeline in India and overseas. How large is the current market opportunity?

See for offshore market is huge and opportunities are great, but we have been selective and picking up the opportunity because -- we have just entered into offshore segment with one asset only, and we wish to add this split to further assets one by one. So we would be going watchful and selective while taking those opportunities. Having said so, in market opportunities are immense.

So have we finalized on any CapEx or guidelines for next 3 years, what we need and which vertical we need to do that?

Yes. So with regard to CapEx, we are doing CapEx of around INR 150 crores under PEC this year. And we would be adding a few more assets under rig segment and Gas Processing segment as well. So more or less for this year, we are targeting to have CapEx of around INR 300 crores -- and we'll be able to achieve some good orders in offshore segment, then this CapEx can increase further.

The next question is from the line of Darshil Javeri from Crown Capital.

Firstly, congratulations on a great set of results. Hopefully, I'm audible...

Yes.

First question, sir, all the write-offs from Kandla we've taken, right? Like there's nothing else left for us to take in Kandla, right? Or any other write-off.

Correct.

Okay. Fair enough, sir. And sir, just wanted to know that -- so going forward, like how do you see our EBITDA margins like our revenue, you've given a very good guidance of 25%, 30% growth, right? So in terms of EBITDA, how do you see that, sir? How do you see that growing right now?

So EBITDA would remain on growth trajectory only. And probably what we believe is we should be able to maintain EBITDA of 44%, 45% year-on-year. It may vary 1% or 2% here and there, but no major movement.

Okay. Okay. Fair enough, sir. Fair enough, sir. And sir, just wanted to know like when we are planning for another INR 150 crores of gas and rig segment, so what is the revenue potential from that? Like I want to understand like in terms of do we -- are we planning for a bigger round of massive CapEx or something like a Dolphin acquisition that we did. So are we planning to go for something like that? Or what is the potential from the current CapEx, sir?

No. So the CapEx of another INR 150 crores is pertaining primarily to the equipment, majorly rigs and gas processing units, which we believe we will be able to secure orders. For gas processing, we are eyeing on one tender which we have already bidded. We may get some good order in coming months. So based on the bidding which we have done, we have estimated that around INR 150 crores kind of CapEx we may have to incur on getting award of those bids.

Okay. Okay. Fair enough, sir. And sir, just like on an overall basis, like I think on our subsidiaries like from Kandla and the green hydrogen, what do you feel that potential can be right now, sir, for us, like any kind of traction that we're getting or what is the plan with that part of this business, sir?

Yes. So green hydrogen, we have just entered an MOU, and we have started exploring opportunities. So it would be a little early to comment on the size of opportunity. So we have just tried to add one more vertical as a part of our diversification exercise. And we would be probably in 2 quarters 2, 3 quarters, we may have some substantial numbers or facts to discuss about that. With regards to Dolphin, of course, we are bullish and eye on opportunities. So we may add a few more assets in the fleet.

Okay. Fair enough. And sir, just last question from my end. Sir, in our business, is there some seasonality? Or is it very constant revenue like type of like because -- so how do we see H1 like because of the war or something, is there like possibility of some contract getting delayed or some execution? Or how does that work, sir? Like so in terms of like H1, H2, like it will be similar? Or how does it go forward, sir?

Yes, yes. For our services business, I think there is no similar -- seasonality.

Okay. So Q1 can be similar to Q4 like in general, sir?

Yes, yes. So for us, our services are 24/7, 365 days. So there is no seasonal effect into it. So almost you can say it would be consistently in the same.

[Operator Instructions]. The next question is from the line of Pankaj from Axis Capital.

The great results, lots of congratulations for that. I have some very quick basic questions. On the P&L side, I can see a tax expense of a negative number. Is it because of the debt written off which we have done for that INR 208-odd crores? Or is it something else? Whatever it is, is there a benefit which is expected to accrue to continue to accrue in the next financial year also?

Yes. So that reversal is pertaining to that debt reversal, and it is linked with that exceptional item.

Okay. And in continuation to one response you actually gave for you exploring the higher capacity drilling rigs. Is there some CapEx also which possibly will be kind of coming as part of that? If yes, do you have some idea on the quantum? And is there some funding plan which you have thought about that?

So yes, we'll be able to secure 2,000-odd rig contract, we'll have to go for a new rig and CapEx would definitely be there. So our primary estimate is the rig can be of around INR 100 crores or INR 100 crores to INR 120 crores, but that depends on the availability of equipment as well.

And sir, you plan to fund this through internal accruals or you plan to do something else as part of that?

Yes, internal accrual and debt.

Okay. And my last question is that out of INR 3,000-odd crores order book, how much is likely to get executed in FY '27, sir?

So this INR 3,000 crore order book consists of 15-year contract and rest of the contracts are on an average life of 2.5 years. So I would say more than INR 800 crores kind of orders would be executed for this financial year out of this INR 3,000 crores. And rest, we are expecting some good numbers to add in, which will contribute further.

That's great. Sorry, taking the liberty of asking last question, one more last question. On the working capital side on the debtor, we have seen a significant improvement. I assume this has nothing to do with that INR 20-odd crores written-off which we have done. Irrespective, so is there a plan to kind of do some more stuff on that side so as to bring it to a reasonable level of, say, 90-odd days...

Yes. So it has improved definitely with one write-off because those old trade receivables were unnecessarily showing my working capital cycle large. With regards to another some INR 160-odd crores of old trade receivables, they are still there in the trade receivables. But for them, we are very much optimistic of recovery. And so we have kept them in those receivables.

But there is no possibility of provision bad debt kind of stuff out of those numbers, right?

No. As of now, we have a fair amount of visibility because of some arbitration awards already received in our favor. And so we believe that we'll have a good amount of recovery out of those.

The next question is from the line of Rohan Mehta from Strategy.

First of all, let me compare Dolphin Offshore year-on-year. Can you give me a revenue trajectory and margin profile year-on-year rather than just comparing quarter-on-quarter? I'm asking for a guidance for the FY '27.

Yes. So on revenue front, we believe if we'll be able to secure additional assets, then it will grow very high. But with the single assets which we are already operating, we are expecting top line of around INR 150 crores from this financial year and the current FY '27 with EBITDA of almost 60%...

Perfect. And the second is a bookkeeping question. So our loan to subsidiaries has gone up considerably. Any light that you can throw on that? And will that remain that way?

Yes. So that would go to reduce it because the large chunk has been given to Dolphin for setting up this entire business. So since now Dolphin is earning quite well, those loans would be returning.

The next question is from the line of Parth Agarwal from Bastion Research.

My questions has been answered.

The next question is from the line of Parth, an individual investor.

So firstly, congratulations to the entire Deep team for such exceptional results. My question pertains to the QIP, which we were planning earlier. So are we still going to go through with it given that the cash flows have improved drastically?

No. So we have decided not to go ahead with QIP.

Okay. Okay. And sir, my second question is on the new rigs, if there have been any new rigs deployed in Q4? And like what would be the horsepower and what would be the revenue coming from these new rigs?

So the new rigs mobilized in Q4 were all workover rigs with 100 and 150 tonne capacity. So they would have -- all these 3 put together would have started contributing more than INR 1.5 crores a month kind of.

Okay. Okay. So Understood. So sir, the full quarter will come in this year. And also, sir, one last question, if I could squeeze in. The MOU, which we have signed with Advait Green Energy for hydrogen, maybe if you could comment where the would come in, in this MOU? And I know you don't want to comment on the time lines, but like the technology part of the...

Yes. So the intention is to provide a balance of plant, excluding the main equipment. And we are eyeing on converting this kind of project to be given on charter hire. So we are exploring those opportunities where we can pitch in with our style of work of giving entire project on hiring basis.

The next question is from the line of [indiscernible], an individual investor.

Sir, we have the PECs which have come out with 2 fields. One is Gammadabar and the other one is [indiscernible]. So both of these are so huge and the main differentiating factor is the development wells. So for Gamma, someone has to do 15 wells per year for 3 years straight. And for Gala, 5 wells. So are we like eye for both of these fields because Galay, the oil in place is 2.5x our Rajmundry asset PEC. And also there's a huge amount of oil in place for Galay. Even Gammich, it doesn't have gas that much, it has too much of crude oil. So looking at the size of these both fields, I think it's going to require a huge amount of money. So because of this new requirement of minimum number of wells put the field. So are we having that financial capability to bid for these 2 fields because I mean for 1 year, it's going to exceed more than INR 100 crores, INR 150 crores per field or something like that?

Yes. As far as the financial capability goes, we have that ability to invest that kind of money into these projects. But having said that, what would be the kind of work program, what would be the kind of investment and what would be the kind of bidding strategy would depend once we have completed our studies. So internally, we are looking at the bids, we are trying to study them out. But the answer to that is, yes, we are capable of doing it, but the outcome will only be dependent on once we have completed the complete understanding of geology and how we are going to invest and what is the kind of plan that we are going to...

Great. Sir, the other thing is RAS equipment. I think because of the CGD, I mean, the government push after the Iran crisis, I think we have started offering even online compressors. So earlier, we were only doing boosters, if I'm not wrong. And the revenue potential for RAS was around INR 100 crores. Is the revenue potential increased because of this new offering? Or was it offered even before, sir?

Yes. We remain very confident that now online compressor demand has been growing significantly, and we are also trying to develop our into the online compressor. We have done one trial of making such compressor. We are under testing of these compressors. So once it's done and if this demand gets converted from the booster compressors to online, I think we would definitely be participating in this kind of the requirements.

And the last question, sir, can we expect around INR 50 crores in FY '27 FY27, revenue INR FY '27.

Yes. So we are expecting growth of around 25% to 30% year-on-year, so definitely.

Yes. And also, sir, there are 2 drillers, [indiscernible] and B. Vishal, they are about to get listed, and they are also raising a huge amount of money. So they might be listed at a very good rate. So I think congratulations on them listing because many investors will be having someone to compare with, right? So Shanda has around 5 drilling and Vishal is into well intervention and also they are into PEC. So we might get someone to compare with

Yes, yes. So it is always good to have a peer comparison so that we can show how good we are.

Yes. And the last question is regarding Advait, how much...

I think there are a few more participants are in line. If you can just come back in line.

think there are a few more participants are in line. If you can just come back in line. The next question is from the line of Sudhir Bheda from Bheda Family.

Sir, my question is like the CapEx plans are there, and we are investing in rigs. So what kind of ROI we are looking at the new CapEx.

More than 20% kind of opportunities are shaping up with higher capacity, you will have a good margin as well.

So it is like 20% plus? Correct.

Correct.

The next question is from the line of Sanjay Shah from KSA.

If you could just be kind enough to tell us how you think about the company, not from fiscal '27 or '28, but just from a 3- to 5-year perspective, just given the track record and what we have achieved, how big the company can be in terms of revenue, in terms of the business composition, production enhancement, some of the other initiatives. If you could just lay out the road map qualitatively or with numbers, that would be really useful.

So Sanjay bhai, the fact is with the kind of the environment that is currently going on for oil and gas, I think it's very exciting and the sector is getting promising day by day. The services are getting more into play, the various services of all our verticals that we are active into I believe now government is laying more focus on drilling more wells, trying to produce more oil and gas. So in turn, everything, it's looking quite promising. Our business has already been growing more than 30% year-on-year, if you could see the last 2 or 3 years. And we tend to believe that this kind of traction will continue for at least -- I don't -- but at least we have a vision for at least 3 to 5 years is something that this kind of a growth should keep continuing. Maybe a few percentages here and there. But barring that, now that government has a great move, on this sector, it won't be surprised company could even get double in next 3 to 5 years. We never know that. But that's quite possible as we -- and now as we being the player in the industry, we have quite a big market share as far as the onshore operations go. And now we are also trying to lay our focus into a bit into an offshore as well. So that put together, along with our growing demand of all our verticals. So we are quite hopeful that in next 3 to 5 years, company would grow significantly from where we are here today.

Understood. And sir, if I were to just ask you one more question, I don't know whether it's a fair question or not, but amongst the different business segments that we have, would it be fair to say that the most exciting would be the opportunities in the products and enhancement...

Yes, definitely production enhancement would be very exciting because that concept allows the company to grow to produce more oil and gas and get the revenues out of it. So definitely, that is one of our bull's eye. We are quite very closely monitoring these opportunities. But having said that entire value chain into the sector is also equally promising because as I mentioned, we have a good amount of market share as far as the services go. And therefore, any demand that is coming up would give us an advantage to win those kind of projects. So PC, definitely, yes, it is quite a good and promising business that we are looking into. But every sector of whatever work that we are doing are equally exciting.

Perfect -- if I can just squeeze in one last question to Rohan bhai then. Rohan about the Prabha Industries receivables given the rights issue out there, has that been now in some ways reversed in terms of the cash flows?

Yes, yes. In fact, we have received a good amount of loan return back from Prabha. And I think in this year, it would be almost now.

The next question is from the line of Bhavya Gandhi from Bajaj Alternative Investment Limited.

I just wanted to reconcile the number growth number for the next year. If we exclude the PEC, our order book currently stands at INR 1,500-odd crores. And if it's average order execution period is 2.5 years, that comes to closer to INR 600-odd crores versus you are guiding 25% to 30% growth on the current numbers, which is around INR 1,100-odd crores. So where is the difference in the revenue coming from?

The differential revenue would come from the new orders, which we are expecting to get in, in first 6 months of this year, where we'll be able to mobilize those projects probably in first 6 months.

Okay. So to meet that gap of incremental revenue, how much orders do we require?

So of course, we are eyeing on some good amount of order conversion. And based on those orders only we have considered that. So you can just reverse calculate the balance amount. So there are 2, 3 major contracts we are eyeing on, which we believe should be awarded in the next month or so. So that will definitely add into our revenue.

Okay. Got it. And just one last thing on the incremental oil exploration, is it happening more on the offshore side or on the onshore side also, we are seeing some traction? Because if you look at the ONGC, they are planning $20 billion CapEx on the offshore side. Nothing mentioned on the onshore side. So just wanted to understand if there is incremental push on the onshore as...

I believe the push is equally both on onshore and offshore. And while it would not be -- I don't know whether that would be any documented thing or that what kind of opportunities are looked forward for onshore and offshore. But we in industry are constantly witnessing this, that the push is coming in from all the areas. And as a matter of fact, if you even see that it's -- the clients are not only ONGC, it's ONGC also Oil India and now a lot of private players as well. And I'm not getting into a comparison of what onshore and offshore is. But if you get some time, please look into our presentation where we have mentioned that what are the pros and cons, not the cons, but what are the pros of both onshore and offshore, which will give you a visibility that why drilling onshore is also something that one cannot miss into this sector.

The next question is from the line of Parth, an individual investor.

I'm just having one request like can you -- I mean, from next time, can you provide a detailed footnote of the order book?

Detailed footnote by me, if you can just explain.

I'm not able to hear your voice. Am I audible?

Yes, yes, you are audible.

So I'm just asking like can you provide some detailed footnote of the order book like many companies provide like first, there is an opening order book, for example, then there is some addition -- new additions, then there could be some executions or deletions and then there is closing order book. Like that sort of thing can you provide?

Yes. I think quarter-on-quarter, we do provide order book, but the way which you are seeing, we can look into it.

Yes. So it would be very helpful if you can provide from the next time as many investors follow your order book, so it would be really very helpful.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you, everyone, for joining this call. It was a pleasure interaction with you all. If you have any further queries, you can directly connect us. We would be happy to answer all your queries. Thank you.

Thank you. On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.