Seamec Limited (526807) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 9 Months FY '25 Earnings Conference Call of Seamec Limited, hosted by Arihant Capital Markets Limited. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Balasubramanian from Arihant Capital Markets. Thank you, and over to you, sir.

Thank you, Ritika. Good evening, everyone. On behalf of Arihant Capital, I welcome you to the earnings call of Seamec Limited for Q3 FY'25. From the management side, we have Mr. Naveen Mohta, the Whole Time Director; Mr. Vinay Kumar Agarwal, CFO; and Mr. Sunil Gupta, Vice President, Strategy and Investor Relations. We welcome the management of Seamec on this call. Now I invite Mr. Naveen Mohta, the Whole time director to give opening remarks. Following which we will open the floor for Q&A. Over to you Mr. Naveen Mohta sir.

Thank you. Good evening, everyone, and welcome to Seamec Quarter 3 FY '25 earning call. Thank you for joining us today. I am Naveen Mohta and I'm here with Mr. Vinay Agarwal, our CFO; and Mr. Sunil Gupta, Vice President, Strategy and Investor Relations. As we review the offshore services landscape for the quarter 3, the demand for offshore oil and gas services remain substantial, especially in India. Despite some challenges in this quarter, India continued to see considerable growth in its energy sector. As the country advances towards becoming a $4 trillion economy, energy demand is expected to rise significantly. India's reliance on fossil fuels, particularly natural gas, it remains high, and it provides opportunities for offshore operators like Seamec. Additionally, the projected 22% growth in India's refinery capacity over the next few years, further strengthen the long-term outlook for the offshore sector. In this context, we continue to see substantial opportunities ahead, particularly following India's recent launch of its largest oil and gas bid round. The government is now offering 25 offshore blocks, spending 1.91 lakh square kilometers, a move, which is aimed at boosting domestic production and improving energy security. This initiative is expected to generate considerable interest and opportunities for offshore service providers like Seamec. Despite these positive changes, we experienced some delays in contract orders during quarter 3, which has impacted our performance. While the delays in project commencement were a challenge, we remain confident that this contract will be executed in the upcoming quarters, helping to drive growth in future. A key highlight this quarter is the successful commencement of a new charter for our vessels, Seamec Swordfish. The vessel began a 50-day charter with Maritime Mermaid Subsea Services in Saudi Arabia with a firm order value of USD 3.46 million. This contract not only reinforces our position in the Middle East, but also reflects the increasing demand for the offshore services in the region. We are also pleased to report that Seamec Diamond after completing necessary repays successfully resumed operations with ONGC on November 22, 2024. This marks our vessels return to service, which strengthens our ongoing partnership with ONGC and shows continued contribution to their offshore projects. Additionally, we have secured a new contract for Seamec III in the agreement with the [indiscernible] Asian Energy Services Limited for offshore work on the East Coast of India. This project already underway as we speak, involves [ sea diving for SPOS ] installation and field start-up activities a total value of USD 2.47 million. This contract reflects Seamec's ability to secure high value opportunities in our rapidly growing Indian offshore market. While the quarter's results have been impacted by delays, these developments are a testament to Seamec ability to navigate the challenges and secure valuable contracts, both domestically and internationally. We firmly believe that the worst is behind us. And from here onwards, we shall be on a growth trajectory. We remain committed to leveraging our advanced fleet and specialized capability to meet the growing needs of our clients in the offshore oil and gas sector. I will now hand over the floor to Mr. Vinay Agarwal, our CFO, who will provide a detailed overview of our financial performance for the third quarter. Over to you, Vinay.

Thank you, Naveenji, and good evening, everyone. I warmly welcome everyone participating in today's Q3 and 9 months FY '25 earnings call. Allow me to walk you through the consolidated financial performance for the third quarter and 9 months FY '25. Our top line for the quarter stood at INR 139 crores compared to INR 219 crores in Q3 FY '24, reflecting a 36% decline year-on-year. At the stand-alone level, revenue declined by 35%. EBITDA for the quarter decreased by 54% from INR 96 crores in Q3 FY '24 to INRR 34 crores in Q3 FY '25. On a stand-alone basis, EBITDA decreased by 61% on a year-on-year basis from INR 94 crores in Q3 FY '24 to INR 36 crores in Q3 FY '25. Profit after tax on a consolidated basis resulted in a loss of INR 3 crores against a profit of INR 56.4 crores for the same quarter in the previous year. At the stand-alone level, profit after tax decreased from INR 63 crores in Q3 FY '24 to INR 2 crores in Q3 FY '25. The ROCE stood at 9% and ROE at 10% on a consolidated basis. Including the quarter, company has performed below expectation because of lower deployment of Seamec III and Seamec Swordfish and unexpected breakdown in Seamec II. However, we have secured a 2-year contract for Seamec Swordfish and seeking Board approval for transfer of Seamec ANANT from the parent entity, HAL Offshore Limited at USD 70 million. It's a 2023 constructed vessel with a remaining useful life of 23 years. The acquisition is expected to be completed by Q2 FY '26. With this, as a company, we believe to be back on track in the coming year. Thank you. I will now hand it back to the moderator to facilitate the question-answer session.

[Operator Instructions]. The first question is from the line of Aditya Sen from RoboCapital.

Sir, can you please share the charter rate at which Seamec Swordfish were deployed?

See the charter rate for the Seamec Swordfish has been already shared on the stock exchanges for both our contract, for the new contract for the 2-year terms, which we have been signed, and for the other contracts with the Mermaid. So both the contract and the contract value is already in the public domain.

Naveenji, what would be the rate if we reduced from that document, $76,000?

Yes, it is upward of 76 -- it is $78,000 actually.

$78,000, okay.

$78,000 per day for 2 years.

Okay. All right. And do you have an update on this NPP Nusantara and these were the upcoming vessels as per the Q1 results, right?

Yes. So as has been already intimated to stock exchanges, regarding the NPP Nusantara, that agreement has been signed for buying the vessel. So the tentative delivery -- the delivery is going to be taken sometime around July or August, so we are also hopeful of completing that process of Nusantara acquisition sometime in Q2.

And what about PEARL.

PEARL, there is a rethinking by the management. So there are some issues going on. So as of now, the management is rethinking on that acquisition of a PEARL because there are issues going on with the seller. So right now, it is on pause.

Okay. And this Nusantara would be of similar [ rate ] as of Swordfish or any of the existing vessels that we have?

Nusantara is similar to the fleet of the vessel already owned by a company, it is a diving support vessel and it will be EPS accretive from the day 1 because it will also come with the contract in hand. So it is going to add to the top line as well as bottom line from the day 1.

So, you already have the contract. All right.

Yes, it already have a contract in hand.

The next question is from the line of [ Nakul Joshi from NJ Associates.]

So I just have a short question. If you could just elaborate on the specific reasons for the delays in the commencement of contracts during Q3 FY '25, and like how confident are you that these delays will not affect any future performance?

Okay. So as told by Mr. Vinay also that this result were impacted due to the delay in commencement of the charter for the vessel of Swordfish. So right now, we have already announced that vessel is now contracted for 2-year charter. And presently, also, this is working. So there is no reason now that, okay, there will be any kind of delay or that turnover will be impacted.

Also, if I may add, Sunil, this side. Nakul we had already advised this delay in our previous con call of Q2 because that was evident, and we had frowned our investors about that. Secondly, see, whenever our vessel goes from 1 contract to other, there are possibilities of certain delays. Our job is to minimize such delays so that there is a minimal loss to the P&L. Right now, after this vessel, most of our vessels will be running on minimum 2-year contracts. And the only thing that can impact today is any unforeseen breakdown. Otherwise, we are confident that the company will run its P&L to the best of the ability.

Absolutely. Just a small follow-up, like any measures which we have taken to mitigate such delays in the future?

Nakul, these are business saying when we start discussion with our channel partners, there are delays on their side from deployment. So if not that we were not working actively on this. We had been pushing this for the past 6 months, knowing that this time can come, we had, in fact, and we said that the vessel will go in Q2 only -- sorry, Q3 beginning only. But since the charterer -- the scope of work was delivered at chartered and so we had to delay this contract. And now there is a 2-year contact. So we are hopeful that such delay will not come in at least in most of our vessels. Only Glorious Barge will be renewing its contract next year. Otherwise, most of our contracts are full for the coming year.

The next question is from the line of [ Anirudh from Veer Capital.]

I have multiple questions. Can you talk a little more about Anant deal and how it's going to impact our financials? When the deal is likely to be commenced? Second question Yes, I have few more so you can finish first then.

I think, we can take one question at a time, so that will give you a better sense also.

So in case of Anant, we have the approval of our boards, which we have received. And this is being transferred from our parent company, HAL Offshore at a consideration of USD 70 million. And with the remaining useful life of 23 years, this vessel is 2023 build and we are getting -- we are projected to get a 70-odd-percent of ROCE in years to come. So it's a very good acquisition for us, and this is likely to be completed by Q3 this year, '26, sorry Q2 '26.

I would like to add something. See, today, a secondhand vessel market is very tight. And even a secondhand vessel is available in the range of $50 million to $55 million, if I'm correct, Naveenji. So this is a new brand vessel we have considered the best market rate while transferring this asset. Secondly, the -- as you would have seen, I don't know whether it has gone in the public or not, even the promoter has agreed to take part equity against this consideration till the final limit of his shareholding.

Okay. That's a very good thing.

It would be funded through promote issuance of equity to the extent we can, there is good internal accruals and the balance will be funded through debt.

Okay. Sir, I have a few other questions because I want to know is there any ship going for dry dock -- any time line for any large ship going for dry dock next year?

See, the dry docking is a regular activity for shipping industry. And since we have a big fleet of vessels. So there will definitely 1 or 2 dry dock always coming in the year. So definitely, there are dry dock in this year also, and which has been planned and which has been factored into the working of the contract. We try to minimize that disruption so that if it is possible to do the work when a vessel is idle. So it will be done. And if it is not possible, then we will be taking the vessel for dry docking. So there are 2 dry dock, which will be falling due during this year.

Any of the key vessels going for dry dock this year?

All the vessels are key vessel only.

In the last [ season ] seeing the impact in the revenue in a bigger way.

So the Seamec Paladin and Seamec II will be likely going further dry dock.

Okay. And what is happening at [indiscernible]

Anirudh, your voice was not audible. Can you come again?

[indiscernible].

I am sorry to interrupt. Anirudh, your voice is breaking, we are unable to hear you.

What is happening at London [indiscernible], if you can talk about that investments which we are trying exit.

So in case of U.K. venture, we are in the process of setting up our global office in U.K., which will take care of Europe and African market, but due to certain procedure delay, this profit is getting delayed, and we are hopeful to start our operations in year to come.

Okay. Any more assets which you are trying to acquire going forward apart from Anant? And how...

See, that is a continuous process. Our balance sheet is quite healthy, and we can afford to buy assets. So we continue to look for the suitable opportunities. So there may be some new acquisition during the year or new build or new build of contract will also might be possible. So as I told you and during my address also told, we remain bullish for the upcoming period. And we continue to look for the suitable opportunities.

And anything else apart from what are the other assets owned by parent company?

Can you please repeat?

What are the other assets owned by parent company, which...

No, no. Right now, only Seamec Anant is being brought to Seamec hold only. And this is, again, the shows our conviction and cash commitment of the promoter to consolidate all the operation at 1 entity so that we can focus and we can show the growth to the market.

Secondly, as you said, there are 2 old work boats, which may retire next year. So there is no point acquiring those workboats. There will be only the contracts which remain and when the contracts come up for renewal, we'll prefer to bid them in Seamec directly like we did in Swordfish.

And last question, if you can talk about when -- are you discussing -- can you talk a little more about your international operations, we have got one contract right now. Do you want to -- like what is the -- what you are planning to expand?

Yes. So see, this is a testimony that after a very long time, we have won a 2-year contract in foreign land, okay? We are definitely excited about it, and we will keep exploring opportunities in the Southern Arabian market, Gulf if there is a profitable opportunity, then as Naveenji said, we -- our balance sheet is healthy enough to take care of that opportunity.

And what is your discussion with the ONGC in terms of their CapEx for the Eastern Coast, any other further projects they are looking out to expand, any CapEx they are doing it.

So we'll see whenever the new scope of work comes, definitely we'll try to bid for that scope and will inform the market accordingly.

The next question is from the line of [ Rohan Baranwal from AS Jacob.]

I have a few questions. So first question is, sir, what is the progress on the Nusantara and other vessel consolidation?

We have just informed you that Nusantara is expected to come in Q2 next year. And HAL Offshore vessel, which is Seamec HAL Anant is also expected next year, Q2.

Okay. And sir, you've mentioned about the $70 million vessel from HAL. Can you please share some light on the revenue potential?

The revenue potential, Vinajji, you have the number?

Yes. So this vessel will be deployed with ONGC through HAL also again at a day rate of around [ INR 45,000-odd ] per day. So it's a good revenue potential and it will definitely give us an IRR of around close to 14%, and it will be a period of around 6 years.

So we expect that around INR 135 crores of revenue will be added on a full year basis after the acquisition.

Okay, sir. And sir, what is the CapEx and debt profile for the next 2 to 3 years?

So CapEx, as you already informed, there are 2 vessels. One is roughly INR 600 crores and other is INR 200 crores. So INR 800 crores plus some dry dock expenses will be done. Debt profile, I would say that we are very much under control. Our debt -- peak debt should not go more than INR 500 crores next year, and that subsequent year will be repaid because we are confident to generate sufficient cash flows for FY '26 and FY '27.

And sir, sorry, if I missed it. So can you share the revenue potential from the Nusantara projects?

Nusantara will -- should give us around INR 135 crore revenue on a full year basis.

Okay, sir. And sir, one last more question is we got the contract from Swordfish, I think the realization is around USD 70,000 per day. So which is highest like in the history of the company. So how do we see the escalation on other vessels as well, sir.

So definitely, once the other vessel come for renewal, we are hopeful that they would also try to be in the similar range, but that all depends on the market conditions when they come up for renewal.

Sorry, one last question is there is around INR 10 crore loss in the other income. So can you please explain the ForEx effect and the strategies in place for risk mitigation.

Vinayji, please go ahead.

So in this case, this was exceptional movement of dollar and GBP, which has created an MTM loss, which is not going to be impacted going forward. This was only a book entry. In fact, what happened, we have dollar loan in our books -- term loan in our book, in which the dollar moved from INR 85.05 to INR 87.1. So there is a difference of INR 2.05, which give us an impact of INR 4.5 crores. And similar to that, we have whatever loan we have extended to our subsidiary in U.K. In that case, GBP had moved again INR 110.07 to INR 104.44. There is an adverse movement of INR 5.73 per GBP, so that again give us a hit of INR 9.4-odd crores in Q3.So that was a major reason of MTM of around INR 13.5-odd crores, which gives us a negative impact. But we are confident this GBP impact will be reversed in coming quarters. So there won't be any real impact in our balance sheet.

Also, let me tell you that most -- since all our contracts are dollar denominated. So any appreciation there should typically benefit the company in the longer term. We can take the next question.

The next question is from the line of [ Ankita Agarwal from M&V Advisor. ]

So given the recent decline in revenue this quarter, what steps are being taken to improve fleet utilization and ensuring better performance in the coming quarters.

Just like we've mentioned in the previous question also, we are very mouthful of situations when contracts are coming up for renewal. But it is a demand and supply situation. And when the customer demands the vessel only then we can place the vessel, okay? We had been trying to do this for 3 months with the same vendor and 2 other vendors. Finally, the vendor has agreed to take the vessels and such situation can come up in future also. But we want to assure people that we are very vigilant and we try to start discussions much ahead of the time, okay? Now that all our vessels are more than 2 years contracted except for our Barge, we believe that there is a reasonable certainty for...

Sorry to interrupt, the line was since placed on hold by Sunil Gupta.

Yes. Ankita, go ahead. I hope I am clear.

Yes, sir? And what are the key drivers behind this volatility? And also like how sustainable is the growth in Q4 FY '25 or beyond that?

Ankita, the business is volatile, we have always been maintaining that we should not look Seamec as a quarter-on-quarter numbers. But yes, our endeavor is that on a year-on-year basis, we should definitely grow the business. As Naveenji mentioned, we are quite confident that next 3 years, there should be a sustainable growth journey that we can make visible for our investors.

The next question is from the line of [ Sahil Vora from MNS Associates. ]

I had a question Yes. Sir, can you -- Seamec Diamond resumed operations after repairs in Q3 FY '25. How was the fleet's overall utilization rate and performance compared to the same period last year. And what specific impact is the downtime of Seamec Diamond have on the overall financial performance?

So when we talk about Diamond, Diamond is the OSB, which gives us a minimal revenue in terms of -- as compared to our other vessels, which are MSB, DSB category. So though it has impacted us in terms of the number of days deployed. It has deployed less number of days as compared to -- actually this was new acquisition for us. So it was first time in Q3, it was deployed as compared to last year, it was not available with us. And in this quarter, it has deployed around 42-odd days. But around 50 days for which it could not be deployed, it has given us hardly any impact in terms of revenue generation. Reasoning is the day rate is very minimal as compared to DSB, which we are running as a [ main clause business ] for us.

And we now expect this to run on a regular basis.

Right. And it has impacted only in terms of repair and maintenance cost. That's it.

The next question is from the line of [indiscernible] Agarwal from UBS Investment.

Sir, I have a question regarding -- you mentioned about the recent launch of India's largest oil and gas bid round. So how do you see Seamec positioning itself to capitalize on this opportunity from this new offshore block.

See, the more country will start giving this area for development, the more will be opportunities available for the operator like Seamec, because the more where we start developing and looking for oil extraction, the more facility will be made over there. And then definitely, there will be more scope for the Seamec. So it is definitely a growth potential which for the company. And it also is confirmation. That company will remain relevant, and it will remain on a growth path for the coming years also.

[Operator Instructions] The next question is from the line of [ Abu Rafey ] from an Individual Investor.

Sir, you have said in your previous con call that you are expected to be profitable on a consolidated basis by the end of this quarter, right? So my question is, so how are you confident on that part? And if it is yes, then can we expect quarter 4 to be a very strong quarter for you as seasonally, quarter 4 is your best quarter among all the quarters?

Abu, we are confident that next quarter is a much better quarter since all our vessels shall be deployed during that quarter. Okay? And next year also, we are quite hopeful that most of the vessels are running as per their contracts, barring just 1 vessel, which is our Barge. So for next quarter and next year, we have good visibility.

And what about the consolidated part that...

Even on consolidated. Let me tell you that last year, we had a INR 43 crore loss in 9 months in the overseas which has reduced to INR 10 crores in this year 9 months. So our endeavor is that going forward, this should go minimal and go profitable.

Okay. Right. So my next question is the 2-year contract that you have got for Swordfish, I assume it will be a full year contract as it is deployed in Middle East. And for the other 2 vessels that you are -- that you aim to acquire, that is Nusantara and Anant the -- and the contracts that you'll have for both those vessels? Will it be a full year contracts or it will have the volatility of the monsoon season...

They are full year contracts.

All are full year. So all the 3 vessels are on a full year contract, right?

Yes. Yes. So while Swordfish should run full year next year. However, Nusantara and Anant will be inducted in the fleet for the part of the year. So FY '27 shall see full year of them also and going forward, yes, full year.

Okay. Okay. All right. And any update on the repair that you have provided last update on Swordfish that it had a breakdown. So any further update on it, whether it is prepared or not yet?

Yes. So vessel has been partly repaid and it is back on the contract. And we are -- right now, vessel is working with the charter. So we have taken some discussion with the charter for some reduction in the rate, but vessel is back on charter now.

Naveenji, when is the next charter of the $78,000 expected to start?

$78,000 is -- it is likely to start between 15th of March to 31st of March.

And do you see any gap from losing the first vendor customer to the second? Any gap of revenue?

There is how many plan this thing is there because this gap was supposed to be there. So -- but it is likely to be less because the vessel -- when their vessel is going to come back in Dubai only. And after that, it will be again deployed from the Dubai only.

Just 2 more questions, sir. On the contract renewal part for Seamec III and Seamec Princess, are they already recontracted or they are yet to be contracted?

So Seamec III, as I already mentioned in my address, it is already working, so -- which is already announced in the exchanges. So it is already there and Seamec Princess also is likely to get the contract award. We are in advanced stage. So while and when it gets finalized, it will be intimated to the changes during the practice. And then whether will start working and doing the work.

Yes sir. I have gone through the Seamec III update that you had provided, but it is very short-term contract, I was asking of long-term contract.

So they don't run on full year contracts, Abu, they work on EPC contracts.

Okay. Okay. One last question from my side. So I truly understand the nature of your business and given the size of vessels that you operate with breakdowns and technical glitches in your vessels are bound to happen. But are there some extra efforts taken by the company to minimize them quickly address these breakdowns such as regular monitoring and preventive maintenance, et cetera?

Yes. All these things are done. See, our industry is quite highly regulated. So it is similar to like aviation. It is more regulated than even aviation also. There are government authorities. There are classification societies. The client itself monitored all these vessels matters very scrupulously. So all the vessels undergo this rigorous maintenance schedule.

Okay. Sir, if I may ask one last question. Any specific reason behind the resignation of non-executive director?

You were talking about?

There is no specific reason. We had, in fact, replaced Mr. Rajeev Goel with Mr. Subrat Das. And we have taken this step consciously to strengthen our management and operational excellence. He was a representative of the parent company, and we have just replaced them.

The next question is from the line of Harsh Thanvi from Valentis Advisors.

So I have 1 question. If you look at the quarterly results, in the overseas segment, we have made a loss of INR 14 crores. So can you comment on that?

Will you please repeat.

So if you look at the quarterly statement, the results in the overseas segment, we have made a loss of INR 14 crores. So can you comment on that?

So our losses are due to interest and depreciation, which we have in Seamec U.K. And whatever interest we are incurring over there because getting eliminated in consolidation. So apart from that, there are very less loss in Seamec and [indiscernible] and we are also in the process of whatever loss we have. We are in the process of eliminating that also, and we are hopeful to get our consolidated numbers in the green in quarters to come.

The next question is from the line of Aditya Sen from RoboCapital.

Sir, given that our Swordfish got a higher charter rate, so for FY '26, should we -- is it fair to assume that we'll get an EBITDA north of 32% on a consolidated basis.

See what you have mentioned that, okay, it has got a very high rate. So that is a fact. It is a very good and very lucrative contract. And we are hopeful that we will be able to get very good return on the -- due to this contract.

The next question is from the line of Udit Sehgal. This will be the last question for today. Udit Sehgal from Tradewalk Research.

I'm a bit new to the company. So I would request you for a few brief. So basically, how many vessels do we have? And since you are talking that they are all on a 2-year charter, what are the current charter rates?

So we have got 7 vessels. 1 OSB, 1 Barge, and 5 MSB and DSB,all are not on the contract of 5 years. There are on 2 years or 5 years. All vessels are on different, different duration of the contract. Normally, we have 3 to 5 years of long-term contracts, but there are contracts for Seamec III and Princess which are on the spot market, and they are running into year long contracts and that only on non-monsoon season. Apart from that, Seamec II, Paladin and Diamond, they are on long-term contracts. And their rate range from USD 9,000 to USD 56,000 per day.

And what about the new contracts, sir, that we have got for Swordfish, when does that start?

New contracts we have received for Swordfish, this is for a 2-year contract. And this -- in this contract, vessel will be deployed between 15th of March to 31st of March 2025. And it's a day rate is USD 78,000 per day.

Okay. So that is only a 15-day contract. So what happens..

No, no, that 3-year contract expected to start between a period of 15 March to 31th March.

Okay. Right. Sir, just a suggestion from my side. Like next time certain improvements we could make in the presentation, that for each of the vessels, if you could get the charter rate and the time period I know the ones which are in the short term, it may be not possible, but the ones at least on the long term, we can get what exactly are the charter rates, and we can understand it accordingly.

While I appreciate your question, please understand that we putting these numbers on presentation is like giving everything to our competition. I would advise you that most of -- we are being covered by 3 analysts right now. And if you take their results report, you will find those data in that -- and in fact, you can approach to Bala, who is hosting this call from Arihant, he can help you giving all those rates.

Great, sir. And sir, regarding this new OALP-X, I think, which was launched today, I believe, at India Energy Week. So do we see any uptick in the exploration activities? And are we involved in that? Or are we involved only at the production stage?

So as I mentioned earlier, now that government has come out with this thing. So it is going to be a huge growth potential for the company. Right now, we are looking at it from that development perspective only that as and when these exploration and all these activities start, there will be benefits, which will trickle down to us in the usual course of time. So there are growth potential that are there. Right now, we are not looking on this opportunity as a deeper ourselves because these are -- that require a very different kind of expertise and quite a high CapEx commitment. So right now, we are not looking to bid for those blocks and to go for the auction of these blocks. So right now, that is not the focus area for the company.

But suppose an operator wins a block, and they are doing the exploration activity because I think right now, they are talking about exploring the Andaman area and a lot of offshore -- deep offshore basins, our ships suitable for that kind of exploration?

No, no, no. So when you are -- when we are talking about those explosion, the explosion is always subsea or when we go into the deeper water below the seabed. So from there only this oil and gas comes out. Okay. So that is for the kind of drilling rigs and all those kind of equipment that can be done. We are having the vessel. So once they are drill oil from there when the structures are made, then only our work will start that, okay, we will help them in installation of those structure and then maintenance of those structure.

Okay. So it will be a long-term story once the oil gas is discovered, then we come in for the support.

Yes. It is a long-term story, but it is an exciting story that, okay, there are growth potential, continue for the company. It is not that company will stagnate somewhere or something like that, no. There are -- government is giving focus on the oil exploration. And as long as the government focuses on the oil exploration, the more the activity, the more the growth for the company.

And do you think the area under the exploration under this policy, has that increased a lot from the earlier policies or do you see like you're saying...

Yes. This time, they have added quite a lot of area in the offshore.

Okay. And I'll connect with Bala regarding the other details. Thank you, sir.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Balasubramanian for the closing comments.

Thank you. Thank you all the participants and Same management team. Mr. Naveen Mohta, sir, and Sunil Gupta, sir, any final closing remarks from your side?

Thank you, Bala, for hosting the call, and we assure our investors that the company is aggressively working for the growth and betterment and creating value to its stakeholders. Thank you very much, and see you in the next quarter.

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